ASTANA – Kazakh President Nursultan Nazarbayev has announced the start of a series of key privatization, fiscal, judiciary and social reforms and incentives as part of the cash-strapped Central Asian nation’s bid to attract foreign investment and enter the list of the world’s top 30 developed nations by the middle of this century.
In an article titled “The Plan of the Nation – The Path to the Kazakhstan Dream” released Wednesday by Nazarbayev’s press service, the Kazakh leader outlined his country’s ambitious goal to achieve the economic standards similar to those of the 34-member nations of the Organization for Economic Cooperation and Development (OECD).
“The Comprehensive privatization plan has begun in Kazakhstan,” the president announced.
“The privatization of state property and the transfer of assets of the quasi-public sector for strengthening and development of domestic entrepreneurship and private business… will give a new impetus to the development of small and medium businesses,” Nazarbayev said.
Sixty-five of the largest state companies owned by the National Welfare Fund, Samruk-Kazyna, the Joint Stock Companies Baiterek and KazAgro, and 173 subsidiaries and affiliates of Samruk-Kazyna will be transferred to the competitive market, the Kazakh leader said.
The government plans to sell such large companies as Air Astana, Kazpochta, KazMunaiGas and the Kazakh railway KazakhstanTemirzholy, among others. The sale of some these companies will be done through IPOs.
“We have entered the 25th year of independence with the new Kazakh dream, which is identical to the main goal of our ‘Strategy – 2050.’ To the middle of the twenty-first century, we plan to make Kazakhstan one of the 30 most developed countries of the world,” the president wrote.
The article was released just five days after the practical phase of the nation’s “100 Concrete Steps Program” to implement five institutional reforms was set in motion with 59 laws coming into force to create an entirely new legal environment for the development of business, economy and society.
“The New Kazakhstan legislation contributes to the achievement of Kazakhstan’s high international standards of development already in place. With this, we will get to our Kazakhstani dream for the middle of the twenty-first century,” the president said.
The initial reforms are aimed at fighting corruption and improvements to the country’s legal system to ensure the rights and freedoms of citizens, Nazarbayev said.
“This will increase confidence in the judicial and law enforcement systems by the citizens as well as foreign investors and improve the overall business climate in our country,” the president said, adding that other reforms involve improvements to the tax and customs administration to create the necessary conditions for economic development.
Kazakhstan simplified the procedure for granting subsoil use rights by introducing bidding mechanisms and is to move to the Australian model of subsoil use, which provides a simplified methodology for all types of geological work, including the search for, evaluation and development of fields.
The government says the immediate goal of the measures is to attract at least 10 major multinational corporations into Kazakhstan’s non-primary sector industry.
Nazarbayev said local companies will set up joint ventures with foreign investors in the fields of manufacturing, infrastructure, energy and other areas of economy. Kazakhstan also promises long-term guarantees of return on investment for energy producing enterprises.
The article notes that, in addition, Kazakhstan will continue to build knowledge-based economy and an increase of competitive, high-tech industries.
Nazarbayev noted that Kazakhstan will become part of a multimodal trans-Eurasian corridor, which will reduce the cost of delivery of cargo from Asia to Europe by more than half. Transit through Kazakhstan will increase from the current 18 million tons to 33 million in 2020 and 50 million tons in 2030, the president predicts.
Kazakhstan will also increase the transit potential of air traffic, mainly through domestic carriers. Kazakhstan will open new international flights to the leading international financial centers of Tokyo, Singapore and Hong Kong until 2019, the president said.
The central issue of the Plan is to create the nation’s international financial center ASTANA (MFTSA) with an independent judiciary, its own jurisdiction based on British principles of rights to the use and the introduction of the principle of investment residency.
“Astana will develop as a business, cultural and scientific center of Eurasia. There will be a modern international transport and logistics system, including a new airport terminal,” Nazarbayev concluded.