From M. Saraswathi
NUR-SULTAN (Kazakhstan), May 18 (Bernama) -- Kazakhstan, the world's largest land-locked country, is banking on its "hard" infrastructures such as highways, rail routes and ports to attract foreign investors.
"Tax and long-term contracts are classic incentives that 90 per cent of countries in the world provide to attract foreign investors. So, our main selling point is not taxes but infrastructure," Kazakh Invest chairman Saparbek Tuyakbayev said.
He said Kazakhstan, which is a transcontinental country largely located in Asia with the most western parts in Europe, has earmarked good physical infrastructure as its attraction.
It shares borders with Russia, China, Kyrgyzstan, Uzbekistan and Turkmenistan and also adjoins a large part of the Caspian Sea, which offers the country a vast potential as a transit point.
"(Hence) we started investing in infrastructure. Over the last 10 years, Kazakhstan has invested more than US$30 billion (RM125 billion) in hard infrastructure which will enable seamless connectivity," he told foreign media at the end of the two-day Astana Economic Forum 2019 here.
"At one end, we have the Caspian Sea port infrastructure and, on the other end, a land port at the border of China. Traditionally we (as a former Soviet republic) have a well connected rail network with Russia and across Central Asian countries," he said.
On top of this, he said, Kazakhstan also offers vast network of highways.
"So, you can see that we invested a lot of money to solve the logistics problem," he said, adding that it enables investors seamless access to a bigger market with a 500-million population by using Kazakhstan as their gateway.
"Kazakhstan itself is a small market. But the markets around it are bigger, for instance Russia, which is 10 times bigger than the Kazakh market," said Tuyakbayev.
The approach is working well for the country, he said, pointing out that the country has received about US$300 billion in investments in the last 15 to 20 years, mainly in oil and gas, followed by other sectors such as logistics and transportation.
"In 2018 alone, total investment received was US$24 billion. Previously, the foreign investments were predominantly in oil and gas but last year more than 55 per cent of investment was in other sectors such as transportation, agriculture and manufacturing," he said.
Major investors in Kazakhstan are the Netherlands, the United States, Britain, France, Italy and China.
With the enhanced connectivity, he believes the agriculture and food industry could emerge as the main driver of the country's economy in the next five to 10 years.
"Before logistics was difficult; now we are better connected, which means we can also export our agriculture products to the neighbouring markets faster.”
Besides infrastructure, the country also provides a very good investment and political climate, he said.
According to the World Bank's “Doing Business 2019” report, Kazakhstan has jumped eight notches to 28th place in the bank's ease of doing business ranking.
It also saw a smooth transition of power when the First President, Nursultan Nazarbayev, resigned on March 19 after almost 30 years in power. President Kassym-Jomart Tokayev, who stepped in to serve the remainder of his term, recently called for an early election on June 9.
Tuyakbayev said the government has also established the Astana International Financial Centre (AIFC) to further strengthen international capital inflow into the country's economy.
The financial free zone, officially unveiled last year, was established based on the best practices of the world's top-ranking financial institutions in New York, London and Shanghai.
Prime Minister of Kazakhstan, Askar Mamin, said the financial and investment ecosystem being developed in the country would allow AIFC to become a regional and international investment and financial centre.
Realising the importance of investments for the economy, the government has also created a coordinating council, which would enable issues arising in the course of investment activities are quickly, he said at the Kazakhstan Global Investment Roundtable.
During the forum's opening ceremony on Thursday, Nazarbayev said his resignation was to pave the way for the new generation of leadership to take over.
He reminded Kazakhstan to work on joining the top 30 most developed countries of the world by 2050.
"We adopted the 2050 development strategy (to achieve that goal). All our strategies and programmes are aimed at this one purpose the whole country works upon," he stressed.
The 2050 strategy, among others, aims to transform the country into a knowledge-based diversified economy driven by the private sector. Key pillars of the strategy are strengthening institutions, improving physical infrastructure and raising the quality of human capital.
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