Kazakhstan represents the bulk of investment potential in Central Asia
On October 4, 2019 in Almaty, the 21st Day of German Economy was held with participation of the Ministry of Foreign Affairs of the Republic of Kazakhstan
The opening forum was addressed by the Deputy Akim of Almaty, Saparbek Tuyakbayev, Ambassador-at-Large of the Ministry of Foreign Affairs of the Republic of Kazakhstan Yerlan Khairov, Deputy of the Mazhilis of the Parliament of the Republic of Kazakhstan Aalbert Rau, the Ambassador of the Federal Republic of Germany to the Republic of Kazakhstan Tilo Klinner, the Independent Member of the Board of Directors of NC Kazakh Invest JSC Ulf Vokurka and others.
Within the framework of the event, three panel sessions were held: “Transformation of Kazakhstan’s Economy”, “Logistics and Silk Road” and “Protection of Investments - Legal and Tax Framework Conditions”, where the Deputy Minister of Foreign Affairs of the Republic of Kazakhstan, Ermek Kosherbayev and the Head of the Representative Office of the Ministry of Foreign Affairs of the Republic of Kazakhstan in Almaty Erlan Iskakov made statements.
The panel session “Transformation of Kazakhstan’s Economy” raised issues of diversifying the sectors of the economy of the Republic of Kazakhstan and moving away from commodity-dependencies, expanding alternative energy sources, and developing production in the Republic of Kazakhstan in view of the promising direction in the foreseeable future. Certain steps of the Government towards informing the public, business community and financial institutions about the improvement of the investment climate were noted.
The investment potential of Central Asia is estimated to be about USD170 billion, where Kazakhstan represents the bulk accounting for USD100 billion. At the same time, they outlined insufficient funds to start-ups in various sectors of the economy, the predicted decrease in the flow of foreign direct investment in Kazakhstan and the world as a whole. Experts welcomed the opening of a credit line of the Hermes insurance company in Kazakhstan.
In the panel session “Logistics and Silk Road”, experts pointed out a whopping 25 percent margin on logistics of the final product in Kazakhstan, although the world standard is estimated at about 11%. Despite the improvement of the logistics efficiency index of the Republic of Kazakhstan (the 71st place), close interaction between science, public associations and government agencies, as well as the development of digitalization of the logistics sector should be strengthened.
The session “Protection of Investments - Legal and Framework Conditions” presented the measures of state support to foreign investors, including the activities of institutions such as the Council of Foreign Investors, the Council for the Promotion of the Investment Climate, the Investment Attraction Council, the introduction of the institution of the Investment Ombudsman represented by the Prime Minister of the Republic of Kazakhstan, the advantage of applying the English law in the AIFC and legal mechanisms for resolving disputes. Positive experience was outlined in building the algorithm of interaction “Consular Offices - Center - Regions”, creating the Direct Investment Fund, liberalizing the visa regime and Kazakh Invest’s assistance of visa issues, as well as creating the joint committee (the Ministry of Foreign Affairs - Kazakh Invest - Anti-Corruption Agency) to protect cases.
In turn, representatives of German companies paid attention to the following issues when doing business in Kazakhstan: tax exemption and customs privileges, lack of attention to the activities of small and medium foreign investors, who can potentially move to countries. At the same time, the English law is a burden borne by investors. In this regard, foreign investors were invited to visit Nur-Sultan city to resolve issues and hold meetings with interested structures.
In general, the forum was fruitful; the two countries expressed their interest in continuing mutually beneficial cooperation and dialogue at various levels.