NUR-SULTAN – Despite an economic slowdown caused by the global pandemic and the recent geopolitical events in Central Asia and Russia, Kazakhstan remains firm in its goal to provide a favorable investment climate and attract more investors. The role of the Foreign Investors’ Council (FIC), a Kazakh advisory and consultative body for investment, remains as important as ever.
The Astana Times spoke to Erlan Dosymbekov, Kazakhstan Foreign Investors’ Council Association (KFICA) Board Chairman and Managing Partner for the Caucasus and Central Asia at EY about the work of the council and its strategy in the light of the new reforms announced by President Kassym-Jomart Tokayev and the current geopolitical situation.
The FIC was established in 1998 with a mission to promote direct dialogue between the Kazakh government and foreign investors by providing an opportunity to discuss important issues related to the development of the national economy and the improvement of the investment climate. The consultative body is chaired by the country’s President.
KFICA serves as an advisory body on ongoing logistical, coordinating informational and technical support to the foreign members of the FIC. The association includes the heads of 41 large transnational companies and international organizations, as well as the heads of key ministries.
Speaking on the main tasks of the FIC under the President’s reforms, the chairman said that the council’s tasks remain related to the improvement of the investment climate in Kazakhstan.
“The council will advise on the potential for growth in business development, improvement of state regulation in the field of technology, ecology, labor, customs and taxation”, said Dosymbekov.
According to him, the council provides good value as “on the one hand, the government has access to the international experience of investors in a variety of areas and on the other hand, investors have the opportunity to contribute to the development of the business environment.”
“We work closely with the government, especially in the context of recent reforms, and maintain a balanced approach to improving the investment attractiveness of the country,” added Dosymbekov.
The investment policy implementation working group, a body co-chaired by Dosymbekov, continues to explore options to improve the legislation in accordance with international practice, upgrade tax and customs administration and seek investment promotion opportunities.
Another key question raised was whether Kazakhstan can continue to be an attractive investment destination amid the geopolitical situation and sanctions imposed on Russia without compromising its long-term growth.
According to Chairman Dosymbekov, the government of Kazakhstan has promptly responded to the first wave of sanctions on Russia, and today it is working to prevent potential secondary sanctions. Furthermore, amidst the current geopolitical situation in Ukraine and the adverse impact of sanctions on the economy, it could be an opportunity for Kazakhstan.
“In this context, we made recommendations to find alternative transport corridors and implement import substitution for manufacturing companies. If we look at sanctions more broadly, we can only agree that the situation itself opens up certain opportunities for foreign investors to come to Kazakhstan. That is why today it is especially important for us to create conditions for doing business. In the eyes of foreign investors, Kazakhstan should build exactly the investment climate to attract more investors and to retain those who are already working in our market,” he said.
He highlighted a transparent business environment, good laws and consistent law enforcement practice as key factors in creating a favorable climate for investment.
“If domestic and foreign investors run their successful economic activities here, our economy will strengthen and consequently, we will become more resilient to external factors,” he said.
Kazakhstan will also focus on sustainable energy and decarbonization as key areas of investment, said Dosymbekov. These topics topped the agenda of the latest 34th FIC plenary meeting.
“Participants (of the session) voiced practical tools and technologies and the experience of advanced countries on the way to achieve carbon neutrality. There were proposals to develop and implement practical measures to relocate foreign companies and open joint ventures, increase investment in green sectors of the national economy and projects that will contribute to the reduction of carbon emissions,” said Dosymbekov.
During the plenary session, President Tokayev also highlighted the main achievement of the council over the last year.
“Last year, foreign partners invested around $24 billion in our economy, which was 38 percent higher compared to the previous year. Remarkably, the non-primary sector of the economy already accounts for over 60 percent of total foreign investment inflows. We greatly appreciate these investments and shall do everything to fulfill all our obligations to foreign partners,” said the President.