ASTANA – The European Bank of Reconstruction and Development (EBRD) is updating its Kazakhstan strategy to highlight Kazakhstan’s Green Economy Transition as an example for other countries. Energy, resource efficiency and climate change mitigation will remain EBRD’s focus for the next four years.
“The priorities of EBRD in Kazakhstan for 2017-21 period reflect a significant increase in investments over the last three years, which have made it the second largest country of operation in 2016,” EBRD Director for Kazakhstan Agris Preimanis told The Astana Times.
“The bank plans to continue significant investments in the country in the forthcoming strategy period, as well as to continue providing support to the Government, the National Bank, the Astana International Financial Centre and other stakeholders with the implementation of the key reforms. The EBRD will continue to work hand in hand with the government and private sector in the country on the implementation of third stage of country’s modernisation, which will provide a new impetus to reform process in the country,” he noted.
“In 2016, we invested more than $1 billion in Kazakhstan, making it the second largest country of operation. We have worked closely with the government on supporting their reform efforts in areas such as tariffs in regulated sectors, privatisation, green economy and creation of the Astana International Financial Centre (AIFC). The EBRD is fully committed continuing our close collaboration,” he noted.
According to Preimanis, EBRD develops new country strategies regularly, to reflect evolving priorities of the government and the lender.
“The new Kazakhstan Country Strategy is expected to be approved in July 2017 and it will run for a four-year period from 2017 until 2021,” he said.
The EBRD will be represented in force during EXPO 2017, the Ministerial Conference, Astana Economic Forum and the Foreign Investors Council, which will be co-chaired by the EBRD President, Sir Suma Chakrabarti.
Currently, the EBRD invites “the public to give its views on policies and strategies,” commenting on its website that the EBRD management reviews all public comments and advises the board of directors.
“The EBRD takes this consultation into account in shaping its assessments and decisions on policies and strategies, alongside feedback by shareholder governments, clients and other interested parties, and draft policies and strategies may be amended accordingly,” the statement quotes, adding that the deadline for comments is May 22.
In the meantime, EBRD notes “significant downside risks” for the country in its draft. Kazakhstan’s economic growth has been recovering slowly, the draft says, from 1.2 percent in 2015, compared to 4.3 percent in 2014, reasoning with the “plunge in oil prices, recession in Russia, slowdown in China and weaker domestic demand. This challenging environment continued into 2016, with the economy contracting from external pressures, the tenge dropping by more than 50 percent after the introduction of a flexible exchange rate regime, high inflation and limited liquidity. Although the situation has stabilised, with growth expected to reach 0.7 percent in 2016 and improve to 2.4 percent in 2017,” the draft quotes.
“Kazakhstan has reacted to the difficult economic environment by accelerating structural reforms and fiscal stimulus, both of which are helping to boost growth. The cornerstone of the reform programme are the government’s efforts to boost the competitiveness of the economy, attract investment and streamline the regulatory framework to promote competition and make it consistent with the Organisation for Economic Cooperation and Development (OECD) best practices,” it continues. “Notwithstanding these efforts, a number of important challenges remain. These include the need to boost private sector competitiveness and generate balanced, sustainable growth that extends beyond Kazakhstan’s hydrocarbon resources and increases the country’s resilience. Further steps are also needed to reduce the state’s still-outsized role in the economy, normalise the banking sector as a financial platform and boost regional connectivity and inclusion and adherence to environmental standards in order to create a more vibrant and competitive private sector, particularly in the non-extractive industries.”
The EBRD outlined its strategic orientations in cooperation with the Central Asian country as follows: balancing the roles of the state and private sector; broadening access to finance, strengthening the banking sector and developing local capital markets; enhancing inter-regional connectivity and international integration; promoting green economy transition.
“Overall, the bank’s experience in Kazakhstan over the existing strategy period has demonstrated the value of joint ownership of the reform agenda, with all key parties involved, and the government’s strong financial commitment. The bank will also continue its strong engagement in assisting Kazakhstan’s transition to a low-carbon economy, including in relation to its Conference of the Parties (COP21) commitments, green legislation and investments in energy efficiency and renewables. While the bank’s work in Kazakhstan to date has been a leading example of its new Green Economy Transition approach, energy and resource efficiency and climate change mitigation will continue to be a major focus of its work,” the executive summary of the draft strategy concludes.