Factors of attractiveness of the investment climate
in Kazakhstan
JSC “NATIONAL EXPORT & INVESTMENT AGENCY “KAZNEX INVEST”
Ministry of Industry and New Technologies of the Republic of Kazakhstan Date: May 13, 2013
Place: Stockholm, Sweden
KAZAKHSTAN: YOUR GATEWAY TO 3/4 BRIC OR TO 3 BILLION PEOPLE
KAZAKHSTAN
4 7
5 5 .
4 5 .
4 5 . 4
The average minimum duration of flights to
major centers of economic activity (in hours)
KAZAKHSTAN
Territory: 2.7 mln. sq. km.
Population: 16,8 mln
GDP, 2011: $ 188 bill
GDP per capita, 2011: $ 11 356
Major languages
• Kazakh (state language)
• Russian (official, business language)
• English, Chinese (young generation)
Main ethnic groups:
• Kazakhs: 65%
• Russian: 25%
• Other: 10%
Source: The Agency of Statistics of the Republic of Kazakhstan
INDUSTRY OF KAZAKHSTAN MANY FOREIGN COMPANIESHAVE ALREADY INVESTED IN KAZAKHSTAN
16,4
8,3
30,2 21,0
Mining and oil Manufacturing Exploration Other
FDI FLOWS INTO KAZAKHSTAN HAVE DEFIED GLOBAL ECONOMIC CRISIS
Source: National Bank of the RK UNCTAD Stat
1,3 0,7 1,0 1,7 2,1 1,2 1,9 2,8 4,6 4,1 4,6
8,3 6,6 10,6
18,5 19,8 19,0 19,0 20,8 17,0
0,0 5,0 10,0 15,0 20,0 25,0
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9 m 2012
FDI inflows in RK, bill. USD
165.5
bill. USD
75.9
bill. USD
46%
By industry
2009-9m. 2012
By country
2009-9m. 2012
27,1 6,4
5,3 4,5 3,4 2,8 2,6 2,5 2,2
19,1 Netherlands
USA France China UK Virgin Isles (UK) Russian Fed.
Canada Japan Other countries
1,0 1,3 3,2 5,0 6,8 9,1 13,0 16,6
65,2 93,6
457,5
-6%
63%
7%
14%
28%
22%
34%
30%
23%
21%
28%
Tajikistan Kyrgyzstan Moldova Armenia Uzbekistan Azerbaijan Belarus Turkmenistan Ukraine Kazakhstan Russian
KAZAKHSTAN HAS ATTRACTED GREATEST FDI PER CAPITA IN CIS
*Compound annual growth rate Source: UNCTAD Stat
CAGR*
Accumulated FDI in the CIS,
2000-2011 yy., bln. USD FDI in the CIS countries per capita,
2011 y., USD
142 244 236
892 1359
1443 1628 979
3257 3203
5777
Tajikistan Uzbekistan Kyrgyzstan Moldova Belarus Ukraine Armenia Azerbaijan Turkmenistan Russian Kazakhstan
INDUSTRY OF KAZAKHSTAN WHY IS KAZAKHSTAN ATTRACTIVE FOR FOREIGN INVESTORS?
Political stability and good investment climate
1
▪ A high level of trust in political institutions and the effective allocation of funds (WEF 2012) in comparison with the countries of the CIS.
▪ ▪ Ease of Doing Business (49 on the list of World Bank Doing Business 2013:
10 place in the investor protection and 17 place in the payment of taxes).
2 Regionally attractive fiscal and non-fiscal regime and protection of foreign investment
▪ Attractive corporate tax rate (20%) and low VAT (12%)
▪ Fiscal and non-fiscal incentives for investors, including in SEZs
▪ 48 bilateral agreements on mutual protection of investments (US also)
▪ Main international arbitration instruments ratified
Stable macroeconomic indicators and high growth
3
▪ GDP growth: 5.5% (IMF 2012)
▪ Low debt / GDP ratio in the world:
15.8% (IMF 2012)
▪ Budget deficit: 2.5% (IMF 2012)
▪ Inflation rate: 6.0% (IMF 2012)
4 Springboard to circa 3 billion potential customers
▪ 3 of the 4 BRIC countries are in 4 hours flight
▪ Customs Union with a population of 170 million and a total GDP of 2 trillion.
▪ Open economy (trade 70% of GDP)
▪ Anticipated entry into the WTO in
2013
2,3 2,4 2,5 2,5 2,8
2,8 2,9 2,9 3
3,1 3,6
3,6 3,8 4
4,7 5,1
5,2 5,5
5,7
127 126 117 115 99 91 87 86 79 74 55 54 47 44 30 24 22 17 11
Czech Russian
Ukraine Romania
Croatia India Bulgaria Azerbaijan
Lithuania Kazakhstan
Turkey Macedonia Jordan Poland Georgia Saudi Arabia Chile Australia UAE
HIGH CONFIDENCE IN POLITICAL INSTITUTIONS AND EFFECTIVE MANAGEMENT OF PUBLIC FUNDS
1,6 1,8 2 2,1 2,1 2,2 2,4 2,5 2,5 2,9 3
3,3 3,4 3,4
3,7 4 4
5,6 5,8
139 133 120 115 113 106 90 86 85 65 63 47 45 43 37 29 27 5 3
Czech Romania
Ukraine Croatia Lithuania
India Poland Russian Bulgaria Macedonia
Georgia Azerbaijan Jordan Turkey Kazakhstan Chile Australia Saudi Arabia UAE
The index of trust political institutions
Place in theranking Place in the
ranking
Efficiency of the allocation of public funds
Extremely low 1 Very high 144 Irrational 1 Highly
Source: The Global Competitiveness Report 2012-2013
144
185 168
154 141 137 130 112
73 67 58 49 32
15 9 1
0 20 40 60 80 100 120 140 160 180 200
Central African Republic Afghanistan Uzbekistan Tajikistan Ukraine Brazil Russian Federation Italy Azerbaijan Belarus Kazakhstan Armenia Ireland Georgia Singapore
DOING BUSINESS IN KAZAKHSTAN IS MUCH EASIER THAN IN MOST EMERGING MARKETS
Source: World Bank Doing Business 2013
