President's progress

Reforms boost Kazakhstan as investment target

Astana: Jane Peimer

Kazakhstan’s burgeoning reputation for stability at the crossroads of Eurasia has received a further boost, with two-thirds of Western business leaders saying constitutional reforms implemented by President Kassym-Jomart Tokayev have made it a more attractive investment opportunity.

Almost 70% of European and US business leaders surveyed by pollsters YouGov stated that the reforms are positive for Kazakhstan, with 77% believing they will have a positive impact on democracy.

Undertaken for The Chamber of International Commerce of Kazakhstan with 350 business owners and directors from companies in the US, UK and Germany with annual revenues of over £250m, the poll found that 82% of respondents believe President Tokayev isprioritising the appropriate issues for reform.

Some 64% agreed that the president is “very” or “quite” serious about improving human rights. In America, 72% of business leaders see him as focused on human rights.

Two-thirds of business leaders surveyed (67%) believe Kazakhstan’s energy supplies could play an important role in solving the global energy crisis.

Europe is Kazakhstan’s biggest trading partner, with more than 4,000 companies with European connections operating in the nation. Businesses, including OneWeb, the satellite company in which the UK government has a stake, and US technology group Honeywell, are the latest companies to start operations there.

The constitutional reforms, overwhelmingly approved by 77% of the electorate in a referendum in June, mark the beginning of what President Tokayev is terming a “New Kazakhstan”.

They are aimed at strengthening Kazakhstan’s parliament, removing “oligarchic capitalism”, rooting out corruption and enhancing the lives of Kazakhstan’s 19.4m citizens.

Since his election in 2019, President Tokayev has also introduced measures to empower women, launched compulsory health insurance and boosted child benefit payments in an effort to reduce inequality. His latest reforms include a pledge to protect human rights, restore a constitutional court and abolish the death penalty.

Kazakhstan, roughly the size of Western Europe and rich in 72 natural resources, with the second biggest oil reserves of any former Soviet Union country, after Russia, is the largest and wealthiest of the five former Soviet Central Asian republics.

Foreign trade grew by 41% to $51bn in the first five months of 2022, according to the Kazakh Bureau of National Statistics, while trade with the UK reached $1.8bn, up 66% in the first seven months of the year.

According to “Is now the time to invest in Kazakhstan?”, a new report from the Kazakhstan chamber, international investors have injected more than $380bn into Kazakhstan since it declared independence in 1991 – 70% of the total investment flow into the Central Asian region during that period.

Foreign direct investment in Kazakhstan reached $7.58bn – its highest level for a decade – in the second quarter of this year and institutional investors including Goldman Sachs, Citigroup and Franklin Templeton, have been meeting the country’s leadership to learn more about potential opportunities.

The London Stock Exchange is also promoting the Kazakhstan’s economic prospects, as the country embarks on a major privatisation programme and key businesses, including Air Astana, in which BAE Systems holds a 49% stake, prepare to float.

Separately, “With the global economy at a crossroads, which way will Central Asia go?” a report, published this month by consultants EY highlighted President Tokayev’s “New Kazakhstan: The Path of Renewal and Modernization” development plan to restructure the economy.

It highlighted the plan’s key priorities, including raising economic growth and inclusion by promoting economic diversification, developing the private sector, reducing corruption and improving governance.

Kazakhstan was said last month by Oxford Economics to be benefiting from a “brain drain” from Russia. The consultancy said an exodus of around 200,000 people in protest against the war in Ukraine is already bringing benefits to the Kazakh economy.

This article is published under the terms of the DB Direct service

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