Kazakhstan represents most of Central Asia’s investment potential
Central Asia’s investment potential is estimated to be about $170 billion, where Kazakhstan accounts for $100 billion. It was announced during the 21st Day of German economy taken place on 4 October 2019 in Almaty. The event featured three penal sessions dubbed “The transformation of the Kazakh economy”, “Logistics and the Silk Road” and “Investment protection – legal and tax framework conditions”, Strategy2050.kz informs with reference to the Kazakh Foreign Ministry.
Diversifying the Kazakh economic sectors, moving away from commodity-dependencies, expanding alternative energy sources, developing production within Kazakhstan due to its significant potential in the not-too-distant future came under discussion during the panel session “The transformation of the Kazakh economy”. In this regard, the Government’s steps towards informing the public, business circles and financial institutes about the investment climate’s improvement were noted.
The event highlighted that Central Asia’s investment potential is estimated to be about $170 billion, where Kazakhstan accounts for $100 billion.
Insufficient funds to startups in various economic sectors, the projected decrease in the flow of foreign investment in Kazakhstan and the world as a whole were outlined. While the experts welcomed the opening of a credit line of Euler Hermes, credit insurance company, in Kazakhstan.
At the “Logistics and the Silk Road” session the experts pointed out a whopping 25% interest margin on logistics of final products within Kazakhstan, against the world standard of 11%. Despite the improvements in Kazakhstan’s logistics performance index (71st place), the need for greater interaction among science, public associations and State structures, as well as the development of the logistics sector’s digitalization were noted.
The steps of State support to foreign investors, including the institutes such as the Council of Foreign Investors, the Council for the Promotion of the Investment Climate, the Investment Attraction Council, the introduction of the Institute of the Investment Ombudsman represented by the Kazakh PM, the advantages of applying English Law in the confines of the AIFC and the legal mechanisms for addressing emerging disputes were presented at the “Investment Protection – legal and tax framework conditions” session. The session also highlighted good lessons on the establishment of the algorithm of interaction “Consular Offices – Centre – Regions”, the Direct Investment Fund, the visa-regime liberalization and KazakhInvest’s assistance in visa issues, as well as the creating of the joint committee (Foreign Ministry – KazakhInvest- Anti-Corruption Agency) to protect cases.
On their part, the German companies’ representatives paid attention to the following issues when doing business in Kazakhstan: tax exemption and customs privileges, inattention to small and medium foreign investors, who can potentially move to third countries. That said, English Law is a burden borne by investors. The foreign investors were asked to visit Nur-Sultan to solve the issues raised and meet with willing structures.
The event was fruitful, both sides expressing interest in further mutually beneficial cooperation and dialogue at various levels.
