The decision by the IMF to reduce global growth forecasts was a reminder, if one were needed, of how global economies are now inextricably linked. It was the latest sombre response to the U.K.’s Brexit vote, which the IMF said had “thrown a spanner in the works” for world prospects.
The IMF’s downward re-appraisal was based not so much on what the outcome of leaving the European Union would be for the U.K. and its trading partners. It was the additional uncertainty that will inevitably flow until the new arrangements are worked out and are in place that led to the downgrade.
Investment decisions on which growth, jobs and prosperity depend require stability and confidence in the future. And looking around the world, they are both in worryingly short supply. In recent days, we have witnessed additional political shocks in Turkey, and in the barbarous death-toll in Nice where four Kazakh citizens were among the latest victims of violent extremism. The July 18 attack in Almaty, which left six people dead and eight wounded, was also another reminder of the challenges in maintaining security and countering criminality much closer to home.
This uncertainty sets challenges for every country. It can be tempting to believe, as some suggest, that you shut your borders to protect yourself against global forces. Even if this was possible, it would also cut your economy and citizens off from the benefits of globalisation, which has been the major driver of prosperity in recent decades.
Kazakhstan stands as an example of the benefits of an economy open to investment and partnership. Economic growth has been strong and sustained over the last two decades with the standard of living of our citizens transformed.
It is why the national response to present challenging economic conditions – including the halving of the price of oil – has not been to retreat but to put in place a programme and policies that will provide an even more attractive environment for continued investment. It is a programme that has received strong backing in both presidential and parliamentary elections in Kazakhstan over the last 18 months.
We have been helped, as this newspaper has said before, by President Nursultan Nazarbayev’s foresight in seeing the global storms ahead. The Nurly Zhol economic programme launched last year is both upgrading our national infrastructure and providing an anti-cyclical boost to our economy when it is needed.
Transport links are, in particular, being transformed to slash journey times between China and Europe and to open up access through the Persian Gulf to the fast growing markets to the south. Along these transport routes, such as the New Silk Road, we are seeing new developments, which will help strengthen and diversify our economy.
The 100 Concrete Steps programme unveiled last year was a series of additional practical modernisation reforms to our economy and society. One in four are already in place with the rest due to come on stream by the end of the year.
We have also launched our most ambitious privatisation programme to help raise revenues and inject new investment and ideas into major national enterprises. The sale of these assets will help launch the Astana International Financial Centre on the world stage – another initiative which underlines a determination to look to the future.
So too does the recent full membership of the World Trade Organisation, which along with the launch of the Eurasian Economic Union and our enhanced partnership with the EU, shows Kazakhstan sees its future as an open trading nation and regional base for investment. The introduction of visa-free regimes for major trade and investment partners, exemption from custom duties for machinery and raw materials and tax incentives has also sent a clear signal to existing and future partners that our country is open for business.
These are all decisions which the government believes will deliver long-term benefits for Kazakhstan and its citizens. These are early days but there are already tentative signs of their positive impact on our international standing and investment decisions.
In the latest World Economic Forum’s Global Competiveness Index, Kazakhstan has risen from 50th to 42nd place. We are one place higher in World Bank’s Doing Business table out of 189 countries.
But it is, of course, the $37 billion decision by the Chevron-led consortium, which we covered in our last edition, to invest in the Tengiz oil field that is the clearest indication yet of confidence in our future. It was a timely reminder that Kazakhstan’s oil reserves of 30 billion barrels remain an important foundation on which we can diversify our economy.
As the IMF rightly made clear, the future of the global economy remains uncertain. There remain many challenges ahead. But Kazakhstan has shown it is going to continue the course that has made it the success story of our region and delivered prosperity for its citizens.