Kazakhstan marks a 28% increase in foreign investments in the first half of 2022, amounting to $14.5 billion. For comparison, the first half of 2021, amounted to $11.3 billion. Today, Kazakhstan’s pool consists of 850 projects attracting investments from more than 30 countries for a total of about $63billion. It involves the creation of about 130,000 jobs. According to recent estimations, over $400 billion of foreign investments had been allocated to Kazakhstan since its independence in 1991.
In the context of industries in the first half of 2022, the largest increase in foreign investment is noted in the following industries: information and communication – by 5.4 times (787.5$ million) compared to the first half of 2021, the construction industry – by 3.9 times (462.3$ million), agriculture, forestry, and fisheries – 2.9 times (20.1$), manufacturing – by 48% (3.1$ billion), wholesale and retail trade – by 43% (2.4$ billion), transport – by 19% (621.7$ million), mining – by 8% (6$ billion).
Three strategic pillars
This increase is a result of the new strategy implemented by the government and led by Kazakhstan’s President, Kassym-Jomart Tokayev. The Head of State’s strategy is built of three main pillars:
Firstly, the adoption of a new Investment Policy Concept until 2026. This concept assumes an increase in investment in the manufacturing industry and the achievement of foreign direct investment of up to $ 25 billion by 2026. The concept provides for reformatting the work on attracting investments and considering new challenges and realities, including the ESG agenda. The concept is aimed at further development of the investment ecosystem, promoting the growth of investment activity of the private sector and unlocking the investment potential of the economy.
Secondly, a full-fledged investment attraction ecosystem has been built, in which, on the outer perimeter, the president’s office and the government are responsible for establishing direct contact with foreign investors and conducting initial negotiations. At the national level, the central state bodies and KAZAKH INVEST JSC are responsible for the formation of an order for investments and the preparation of an investment proposal. At the regional level, district authorities (Akimats) respond to requests from investors and are accountable for implementing the projects.
Thirdly, it is the adoption of unique measures to further improve the investment climate, aimed both to attract new investors, as well as retaining existing ones. For these purposes, Kazakhstan successfully operates a number of dialogue platforms that ensure close and open interaction between investors and the state. Thus, in order to protect the interests of investors, there are operating special consultative and advisory bodies such as the Council of Foreign Investors under the President of Kazakhstan.
The council recently met with the Prime Minister of Kazakhstan, Alikhan Smailov. In the meeting, PM Smailov said that today Kazakh and foreign investors are given equal conditions for receiving preferences in the country. He also added that the government is working intensively to improve the efficiency of public finance management, decarbonization, and digital transformation of the economy.
Stability of legislation
Kazakhstan’s activities today are also focused on reducing the risk for investors and increasing the transparency and predictability of government policies. An important signal for potential investors is the availability of digital services for administrative procedures, for example through online one-stop shops. It is also worth noting that Kazakhstan developed a mechanism of investment agreements that guarantees the stability of legislation for strategic projects.
In the context of the departure of global corporations from Russia, at the request of investors, Kazakhstan is working on the relocation of foreign companies to Kazakhstan. Embassies directly establish contact with the head offices of the largest corporations. Today, substantive negotiations are underway on more than 55 projects, of which 10 companies have relocated.
Thus, Honeywell (USA), Fortescue (Australia), Marubeni (Japan), TikTok (China), InDriver (USA) opened/relocated regional offices in Kazakhstan, Ural Motorcycles (RF/USA) localized the production of heavy-duty motorcycles, and Weir Minerals (UK) opened a production center for the assembly and restoration of pumping equipment, hydro cyclones, valves, etc.
Global Initiatives with EU
The President of the European Council, Charles Michel, recently visited Astana and met with President Tokayev. President Michel said that “Today, the EU is Kazakhstan’s first trading partner and first foreign investor. Kazakhstan is the EU’s biggest trading partner in Central Asia”. Their meeting was followed by the first summit of the EU President with all five Central Asian States (Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan, and Turkmenistan) – EU plus 5.
Michel concluded his visit to Kazakhstan’s capital city by stressing that “You are also a regional transport connectivity hub between East and West, and you are working to diversify connections even further. So the EU is looking forward to the EU-Central Asia Sustainable Connectivity Conference in Samarkand in November. At this conference, we will discuss how to increase the capacity of the Middle Corridor, and we will also present two Global Gateway initiatives, on water, energy, and climate change and on digital connectivity,” Euro Examiner reports.
