NUR-SULTAN – Kazakhstan showed an increase in net foreign direct investment (FDI) compared to 17 countries with transition economies and 34 landlocked countries, according to the World Investment Report compiled by the United Nations Conference on Trade and Development (UNCTAD).
It is reported that the FDI flows to the transition economies of South-East Europe, the Commonwealth of Independent States (CIS) and Georgia declined by 58 percent to $24 billion in 2020, their lowest recorded level since 2003 among the countries. FDI grew only in Belarus, Kazakhstan and Montenegro.
Kazakhstan is the second largest recipient of FDI in the region, where inflows grew by 35 percent to $3.9 billion.
“Growing investment in mining, transport, financial services, telecommunication and energy compensated for declining inflows in construction, metallurgy and trade, which suffered particularly from the effects of the pandemic,” reads the report.
The authors noted that most of the FDI in the country’s large hydrocarbons industry was related to the Tengiz project with Chevron (United States), which is expected to be completed by 2022. The list of projects also includes the Kazakhstan QazTechna bus manufacturing plant project and the construction of the DoubleStar rubber and tire factory with the participation of Chinese capital, and the telecommunication project of Netherlands-headquartered VEON group (VimpelCom).
The economic crisis due to the pandemic also resulted in “major disruptions in the economic activities of landlocked developing countries (LLDCs) and severely hit their FDI inflows, which contracted by 31 percent to $15 billion.” This is the lowest level of aggregate FDI since 2007.
The drop affected all economies in the group except for Kazakhstan, the Lao People’s Democratic Republic and Paraguay.
The data of the UNCTAD report demonstrates that favorable conditions for foreign investors remain in Kazakhstan against the backdrop of the negative impact of the pandemic on the global economy.
According to the forecasts of UNCTAD experts, the growth of the inflow of foreign direct investment in 2021 will average 10-15 percent worldwide and 5-20 percent in developing countries.
It is reported that the COVID-19 crisis caused a dramatic fall in foreign direct investment in 2020 globally. Global FDI flows dropped by 35 percent to $1 trillion, from $1.5 trillion in 2019.