By H.E. Mr. Dauren Karipov, Ambassador of Kazakhstan in Germany
Located in the heart of Eurasia on the border between the Asian and European continents, Kazakhstan is the world’s ninth-largest country.
On 16 December, Kazakhstan will celebrate its 30th anniversary of Independence. Today Kazakhstan is a member of the world’s largest political, financial and economic institutions, and is a recognized driving force behind regional integration.
The country is now Central Asia’s largest and strongest market with one of the fastest-growing economies. Economic growth is expected to reach 4% in 2021 (GDP per capita will be valued at about $9828).
The positive economic development is also based on the country’s resource potential. Kazakhstan occupies the premier global position in terms of proven reserves of zinc, tungsten and barite, second place for silver, lead and chromites, third place for copper, manganese and fluorites, and fourth place for molybdenum. The gold deposits are among the tenth largest in the world.
The country has eight percent of all iron ore, and it stores up to a quarter of the world’s uranium deposits. The raw materials for all high technologies of the future can be found in this country. It has more than 5,000 natural resources, valued at $ 10 trillion. Kazakhstan ranks 6th in the world in terms of natural resources and 10th in terms of total mineral production (excluding oil and gas). This year a digital information platform for investors with all geological information will be created.
Kazakhstan’s favorable geographical location and sensible foreign trade policy offer easy access to markets in neighboring countries, representing 500 million people, including in western China, Russia and Central Asia. This makes Kazakhstan an important transportation hub between the East and West. More than 70% of all transcontinental routes run through Kazakhstan. Over the past 10 years, Kazakhstan has invested $30 billion in transportation infrastructure, and an additional $40 billion is planned to be invested over the next 6 years. To this end, an important role is played by the “Nurly Zhol” Kazakh state program.
Despite the negative impact of the COVID-19 pandemic on the global economy, Kazakhstan had the largest increase in foreign net direct investment (FDI) among 17 countries with transition economies and 34 landlocked countries, according to the United Nations Conference on Trade and Development (UNCTAD)’s latest World Investment Report. Kazakhstan received 34.9% more net FDI than a year earlier, against the backdrop of a global decline.
The country’s consistently high positions in international rankings as well as statistics on the attraction of FDI confirm the high investment attractiveness of Kazakhstan even in times of crisis.
There are opportunities for joint investment through the Kazakhstan Direct Investment Fund (with a capital of 900 million euros), Samruk Kazyna Invest and Baiterek Holding, which invest in equity capital and have agreements with the German export insurance agency Euler Hermes. In his latest State of the Nation address from 1 September 2021, Kazakhstan‘s President Kassym-Jomart Tokayev announced the creation of a new instrument to attract direct investments – the Strategic Investment Agreement.
Kazakhstan has a stable financial and banking system.
Despite the global economic crisis, Kazakhstan is one of just 5 countries whose creditworthiness has been upgraded by the international agency Moody’s (from Baa3 to Baa2, forecast “stable”).
In the World Bank’s “Ease of Doing Business” Ranking for 2020, Kazakhstan took 25th place, ahead of countries like Austria, Japan, Spain.
Small and medium-sized enterprises (SMEs) are of strategic importance for Kazakhstan’s economy. During the independence years, a legal framework was developed in Kazakhstan that encourages entrepreneurship development, including state support for SMEs.
Germany and Kazakhstan are stable, predictable partners. International legal frameworks, various mechanisms of bilateral relations that function effectively have been created.
Kazakhstan is Germany’s most important economic partner in Central Asia (53rd place among Germany’s trading partners). For several years now, Kazakhstan has consistently accounted for more than 80% of Germany’s foreign trade with the five Central Asian countries.
For its part, Kazakhstan accounts for ¾ of all German exports to the region, and is also the country’s fourth-largest oil supplier. Trade between Kazakhstan and Germany in the months of January-June 2021 amounted to 2.3 billion euros.
In the past 13 years, direct investments amounting to more than $8.6 billion have flowed from Germany to Kazakhstan. Around 90% of German investments in Kazakhstan are directed into the “non-raw materials sector”, that is, into the manufacturing industry.
There are more than 600 joint ventures with German capital in Kazakhstan. These include large companies such as SAP, Metro, Knauf, BASF, Linde, CLAAS and others.
This mutually-beneficial cooperation became possible owing to the 2012 partnership agreement between Kazakhstan and Germany that provides for an exchange of raw materials for technology, as well as exclusive preferences for German investors in Kazakhstan, including exemptions from corporate and property taxes, as well as 25-year tax exemptions in special economic zones.
Today Kazakhstan is particularly interested in attracting investors who want to make their investments as efficiently as possible and who are ready to view our country as a platform for the production of goods and services with high added value for further exports.
Under the leadership of the Vice Prime Minister there is a special government group for working with German investors. This mechanism provides quick and definitive solutions to all problematic issues that arise when carrying out investment projects.
For further information
Kazakh Embassy in Germany: https://www.gov.kz/memleket/entities/mfa-berlin/activities/1753?lang=en