Kazakhstan ensures support and protection of foreign investors
By: Alik Shpekbayev
From its first years as an independent country, Kazakhstan has chosen to open its economy to foreign investment and expertise. We recognized that such partnerships were critical for our prosperity and have worked hard to create a climate where businesses want to invest and work in our country.
It has proved a very successful approach. The environment we have created has seen our country ranked 36th out of 190 economies in the World Bank’s latest international Doing Business Report. And, as we hoped, it has helped attract $300 billion of direct foreign investments –70% of the total across Central Asia.
It is investment, too, which has helped drive strong economic growth and transform the living standards and opportunities for our citizens. Over the last two decades, GDP per capita has increased more than five-fold and catapulted us into the ranks of the middle income countries.
But we are ambitious for the future and have set our sights on becoming one of the 30 most developed countries by 2050. As President Nazarbayev made clear, achieving this target requires renewed efforts to dismantle the remaining barriers in the way of investment and business.
In response to his call, there has been important progress across many areas. Red-tape is being cut and bureaucracy reduced. Visa-free travel has, for example, now been introduced for business people from 62 countries.
We have strengthened legal safeguards for investors and are now ranked first on the Doing Business Protecting Minority Investors indicator. A new Investment Ombudsman has been created to follow up complaints along with a specialized court for settling investment disputes.
High levels of protection for investors is also being provided by the new Astana International Financial Centre which will serve not just in Kazakhstan but the entire region. Investors are assured that it is operating to the highest international standards and under the principles of English law.
Importantly, these initiatives have gone hand-in-hand with a new focus on tackling corruption which President Nazarbayev has rightly made a priority. There is now a wealth of evidence from around the world of the corrosive impact of corruption on prosperity, economic growth and trust – and how it discourages investment.
A new strategy has been put in place with the aim of rooting out corruption, wherever it remains, from our economy and society. It is designed to eliminate the conditions where corruption can thrive as well as making sure there is no hiding place for those guilty of criminal behavior, regardless of their position or rank.
The modernization of our public services is already proving a powerful weapon in this fight. More than 70 per cent of public services are now delivered electronically or through special Government ‘one-stop shops’.
It is already the case that all business licences and permits are now applied for and delivered online. It is not only quicker and more convenient but also eliminates opportunities for bribes and backhanders.
Plans to cut by a third the number of supervisory and monitoring functions are in place. This will prevent duplication and also reduce the number of opportunities for corrupt interventions or illegal pressures.
At the same time, the Agency for Civil Service Affairs and Anti-Corruption, which I head, has stepped up efforts to identify, prosecute and punish officials guilty of corruption. The result has been that over the last three years, 976 cases of corruption have been identified and investigated and 389 officials were convicted.
Among the successful initiatives has been the setting up of a confidential help line with a dedicated staff to report corrupt behavior and financial rewards paid to whistle blowers.
At a Government level, our agency is working to improve co-ordination with other departments in the battle against corruption and to improve the investment climate. We are also co-operating closely with international bodies and experts to help us assess the effectiveness of the steps we are taking and to see what new measures could be put in place. We are keen as well to hear from businesses and investors to discuss what is working well and what can be improved.
We know there is more to do as Kazakhstan’s position on the Corruption Perception Index compiled by Transparency International, underlines. But while most countries have seen either no improvement or a deterioration in their scores in recent years, Kazakhstan, in contrast, is improving. We are determined to accelerate this progress and are committed to doing all we can to provide the right environment for investors and businesses.
The author is the Chairman of the Agency of the Republic of Kazakhstan for Civil Service Affairs and Anti-Corruption