Only a few years ago, it seemed that the argument of whether countries thrived best when they had economies open or partially closed to trade and investment was decided. Although there was still a vocal minority who doubted the benefits of removing barriers and focused on the draw-backs of globalisation, it had decreasing influence. Instead, we saw a hardening consensus – supported by the evidence of sustained periods of strong growth and shared prosperity – that open economies were the way forward.
Kazakhstan’s own experience, as we have said before, gave powerful support to this view. The decision was made at an early stage in our country’s modern history to encourage outside investment and partnerships. From the top, policies were put in place to deliver this ambition. Its success can be seen in the fact that Kazakhstan has attracted over 70 percent of direct foreign investment into Central Asia which, in turn, has been a powerful driver of economic progress and improved living standards.
But what had appeared to be a settled global consensus is now fracturing a little more every month. Instead of the remaining economic barriers being dismantled across the world, we see fresh ones being erected almost everywhere we look. In some cases, these new economic obstacles are put in place as political punishments. In others, their imposition is a bid to remedy what are seen as unfair economic practices or outcomes. Invariably, of course, both approaches lead to retaliation and new brakes being placed on trade and investment, which have a knock-on impact on all countries, not just those directly involved in the disputes.
We will see how these new barriers affect global growth, investment and prosperity in the months and years ahead. But few believe the outcome, at least in the short-term, will be anything other than negative. Even the supporters of such actions generally accept that there will be pain but suggest that, in the long run, it will prove to have been worth it.
Despite this change in attitudes, Kazakhstan, as we have said before, is sticking to the approach, which has served it so well. Whether it is its central role in the Belt and Road initiative and Eurasian Economic Union or its enhanced partnership with the European Union, the country continues to champion the benefits of removing barriers to trade and economic co-operation.
The Astana International Finance Centre – the subject of our editorial in the last edition – is, as we said, a strong symbol of this commitment. The official launch of the AIFC last week and the emphasis placed during the event on spreading prosperity throughout the region was a vote of confidence in an open global economy.
The creation of Kazakh Invest, too, underlines the country’s continued welcoming approach to the widest possible partnerships. Rather than the increased suspicions we can see elsewhere about outside investment, Kazakhstan believes it has a critical role in strengthening the economy and, importantly, in its continued diversification and modernisation.
While foreign investment in Kazakhstan has up to now understandably centred on the country’s successful oil and gas industry, opportunities increasingly exist in many other sectors, including food processing. Kazakh Invest’s role is both to help publicise these opportunities, in whichever field they exist, and then make it easier for potential investors to get involved.
Around 50 priority projects, amounting to some $20 billion, have been shared in recent months by Kazakh Invest’s network of offices in financial hubs across the world. Chairman Saparbek Tuyakbayev revealed earlier this summer that such is their attractiveness that five to 10 international companies have expressed an interest in each of these projects.
But finding potential partners is only part of Kazakh Invest’s role. Once interest is shown, it then uses its expertise to help them navigate their way through the process and, wherever it can, identify and remove obstacles to their involvement. It is a one-stop shop approach, with a strong regional input, which is key to delivering on the ambitious targets set in the country’s National Investment Strategy to increase FDI by another 26 percent by 2022.
The experience and knowledge they gather will also help guide the action being taken on a broad front to continue to improve the country’s investment climate. These efforts have already won international recognition. It is worth repeating that Kazakhstan was judged in the World Bank’s 2018 Doing Business report as having the best protection for minority investors of any country in the world.
It is a remarkable achievement for a country, which was part of the Soviet Union just a generation ago. The fact that Kazakhstan wants to set the highest international standards across the board shows that there will be no retreat from a belief that removing barriers to trade and investment, wherever possible, is the best way to boost national, regional and global prosperity.