ASTANA – President Kassym-Jomart Tokayev emphasized the need to enhance Kazakhstan’s investment climate and business conditions during his annual state-of-the-nation address on Sept. 2.
Photo credit: Akorda
The President’s words underscored the importance of decisive action to attract capital amidst intense global competition.
“In the current context of fierce international competition for investment, it is crucial to make decisions that attract capital in the ‘here and now’ mode,” Tokayev stated.
He mentioned that to facilitate this, the Investment Headquarters under the government has been granted expanded powers, enabling the accelerated implementation of projects in key sectors such as deep metal processing, oil, gas, coal chemistry, tourism, energy, and mechanical engineering.
Tokayev urged the government and local administrations to intensify efforts to prevent a decrease in direct investment in the economy. He also called for identifying large-scale projects that could be financed through public-private partnerships with the involvement of international financial institutions.
Reducing state participation in the economy
Tokayev highlighted the urgent need to reduce state participation in the economy, noting that it remains high, creating unequal market conditions and hindering private initiative. He acknowledged the lack of an optimal policy for managing state-owned enterprises and stressed the importance of a stable and systematic approach to financial relations between holdings and the government.
The President mentioned his 2022 address, in which he instructed the introduction of a “regulation from scratch” approach. This initiative has already led to the elimination of over 10,000 excessive and irrelevant requirements that restricted entrepreneurial activity. However, he noted that entrepreneurs still complain about excessive government control and supervisory activities. Tokayev called for continued collaboration between the government and the Prosecutor General’s Office to address these issues and improve the investment climate.
“It is essential to clarify the interaction between the state and capital owners, particularly in the context of the work on the return of assets,” Tokayev added.
He reiterated his position from last year’s meeting with businesses, emphasizing that the capital amnesty would require reinvesting funds into Kazakhstan’s economy, ensuring that these assets benefit the country. Tokayev proposed that entrepreneurs listed in the relevant register be allowed to conclude agreements without admitting the illegality of transferred assets. He also called on entrepreneurs to contribute to the national budget and invest in socio-cultural infrastructure, with the possibility of being recognized on a “golden list” of philanthropists.
“If there is refusal or delay in this process, the conversation with such entrepreneurs will be different,” Tokayev warned, underscoring the need for transparency in the use of returned assets.
Supporting medium-sized businesses and agro-industrial investment
The President tasked the government with increasing the share of medium-sized businesses in the economy from the current 7% to 15% by 2029. He criticized the lack of concrete measures to support these businesses and called for creating a comprehensive and easily navigable list of support measures. Tokayev suggested leveraging fintech tools to foster the development of small and medium-sized enterprises.
Attracting investment in the agro-industrial complex was another key focus of Tokayev’s address. Despite the challenges posed by recent floods, Kazakh farmers completed the sowing campaign on time, an achievement for which the President expressed deep gratitude. He noted that while funding for spring fieldwork had doubled, 70% of financing for the agro-industrial sector still comes from the state. Tokayev stressed the need to involve commercial banks in financing this industry and advocated for a gradual shift from direct subsidies to affordable lending.
Tokayev emphasized that land is a critical element of the agro-industrial sector’s investment attractiveness. He revealed that the Land Withdrawal Commission had identified over 2,000 illegal decisions by local executive bodies regarding the allocation of agricultural land. He called for the return of such lands to the state under a simplified procedure while protecting the interests of responsible land users.
“Many land users live thousands of kilometers away from the lands they profit from and do not care about the villagers’ lives. We do not need such landowners. The Government and the Prosecutor General’s Office must address this issue,” Tokayev said.
Tokayev underscored the need for the government and state bodies to facilitate domestic business and foreign investment. He warned that hindering legitimate business activities should be treated as a serious offense and called on entrepreneurs and investors to demonstrate integrity, comply with the law, and fulfill their tax obligations.
