City Voices: Maybe now is a better time to make an investment in Kazakhstan?
Azakhstan’s corporations indexed on the London Stock Exchange have had a very combined history, with the horrors of ENRC still fresh in the minds of some investors. But big adjustments are being made in the world’s ninth largest country, which may bring a more positive future.
Thirty-one years after regaining independence for the first time since 1864, the country is moving from an economy dependent on herbal resources to a service-based economy, from a political formula around a presidency to one where strength is shared with parliament, and from a country with a giant public sector to a country where entrepreneurship and assumption are now officially encouraged. of risks.
Perhaps some turmoil is to be expected, given the country’s roots in nomadic steppe life. In fact, since its land area is almost 4 times that of Texas, with a population of 19. 4 million, there is plenty of room for all Kazakhs. who still crave a lifestyle without feet.
For the most part, however, the country is looking to the future as it goes through the three decades since independence that were ruled by the country’s founding president, Nursultan Nazarbayev, who stepped down in 2019 but whose legacy has endured until January 2022. It was then that the protests against the emerging costs ran hand in hand with his successor Kassym-Zhomart Tokayev, who announced reforms to the parliament and fight against corruption through the prohibition of the president’s relatives from holding high public positions.
The reforms earned the stamp of approval from the International Monetary Fund (IMF), which said: “The reform announcements are an opportunity to boost the fight against corruption. Important steps for political modernization, judicial reform and expanding the role of civil society. “And the media was announced by the president earlier this year.
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These are based on notable achievements since independence in 1991. Billions of foreign investment have poured into the country, and the World Bank’s 2019 Ease of Doing Business Index ranked Kazakhstan 25th, ahead of Luxembourg (72), Italy (58), Japan (30), Switzerland (36) and France (33).
Kazakhstan remains a resource superpower with massive reserves of minerals and hydrocarbons, adding uranium, copper, zinc, oil, fuel and a strong agricultural sector. But official efforts are underway to diversify the economy into new areas, adding transportation, pharmaceuticals, telecommunications, petrochemicals and higher education.
In a bid to undo the legacy of more than seven decades of threat aversion within the Soviet Union, the government is pursuing a culture of threat taking and entrepreneurship. That said, the government itself is not ashamed to return to the kind of techniques reminiscent of the communist era, such as this year’s currency crisis, when it limited physical silver and gold exports.
The International Financial Center of Astana, a 1,632-hectare site that plays by its own rules, is literally one of the positions to take risks in favor of the authorities. English law prevails over Kazakh, and its judicial leader is Lord Mance, former Deputy Chief Justice of the United Kingdom.
In the middle of the middle is Astana International Exchange, which will “develop a liquid and deep capital market in Kazakhstan and the Central Asian region. “
Another level at which entrepreneurship can develop is the government company Qazinnovations, whose call is explicit. Subsidies and others are available, tailored to large, medium and small companies, respectively. But this is not a “free money” program, a success that applicants want a proper control team, contracts in position with clients, investments through founders and potential for expansion.
There is hardly a country on earth that does not claim that education is a top priority, yet Kazakhstan perhaps has a better explanation of why than many to brag about. Nazarbayev University, founded in 2010, intentionally created unlike establishments inherited from the Soviet era, with English as the only language of instruction and recruited professors from around the world.
At the graduate level, it is available for papers presented at elite universities abroad.
Not everything is rosy in the garden, just like in the UK and elsewhere. Inflation remains a problem, as does corruption. Russia’s brief intervention in January to repair order as supporters of the previous regime seek to destabilize the new president is curious, to say the least. and a more balanced economy. It will be desirable to see where it is headed next.
Chris Weafer is Managing Director of Macro-Advisory
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