Kazakhstan opens office to shield investors from corruption risks

ASTANA – The Protecting Business and Investments Project Office was launched in the Kazakh capital June 8 to facilitate investing in the Kazakh economy by shielding investors from corruption risks and alleviating bureaucratic procedures.

Photo credit: kyzmet.gov.kz.

Photo credit: kyzmet.gov.kz.

The office was established under a memorandum of cooperation among the Agency for Civil Service Affairs and Fighting Corruption, Ministry of Foreign Affairs and Ministry for Investment and Development.

“Throughout Kazakhstan’s years of independence, private initiatives and businesses have proven to be key for economic development and well-being. The global community gives high assessment to the business environment in Kazakhstan. According to the World Bank’s Doing Business index, Kazakhstan ranks 36 out of 190 states in 2018 and is first in terms of protecting minority investors. Still, unfortunately, there are instances of illegal intervention in business activities, as in three years 976 cases were registered and 389 officials were charged with corruption,” said Agency Deputy Chair Olzhas Bektenov.

“Any investor ready to fully reject corruption practices while running a business [in Kazakhstan] will receive full protection from corruption risks provided by the project office,” he added explaining that assistance will be available to both foreign and local investors.

Located on the premises of the Ministry for Investment and Development, the office will work closely with government and quasi-government institutions, the Atameken National Chamber of Entrepreneurs and international agencies.

“The project office is meant to protect businesspeople and investors, increase trust in government institutions and create a favourable investment climate. We will also launch branches in the regions. The office will seek to identify administrative barriers, imperfections of current legislation and cases of abuse of power and tackle them,” said office head Gulmira Kabiyeva.

To date, nine companies have been referred to the office for assistance.

“We firmly believe that the agency can reduce up to 70 percent of corruption risks related to business activities by stating its presence during the project’s initial stage. Before an investor is referred to government institutions, we will inform the institutions that the investor has been placed under the protection programme,” said anti-corruption policy department head Daniyar Sadyrbayev.

A five-year analysis has shown business people most often resort to bribery in order to receive high quality services from officials or gain access to information.

“While working in Kazakhstan, investors increase the project costs by around 30 percent to account for corruption-related expenses. If the agency works with businesspeople from the beginning of the project, such expenses will be ruled out completely,” he added.

Investors are required to fully restrain and adopt zero tolerance for corruption practices not only during the project execution, but while staying in Kazakhstan generally.

“The Ministry of Foreign Affairs fully supports the initiative and will contribute by informing the foreign audience and current and potential investors about this new investment protection programme in Kazakhstan. We are confident office activities will have a considerable effect in terms of not only assisting in the specific cases it will be dealing with, but also in terms improving the business climate and the overall perception of corruption practices in Kazakhstan,” said Deputy Foreign Minister Roman Vassilenko.