Preface

by

Zhenis Kassymbek, Minister for Investments and Development, Republic of Kazakhstan and Angel Gurría, Secretary-General, OECD

Kazakhstan has made unprecedented economic and social progress since the start of the post-independence reforms in the early 1990s. GDP per capita increased by an average annual rate of 5.2% between 1995 and 2016, making the Kazakh economy the fastest growing of all Central Asian countries. In addition to its expanding oil sector, Kazakhstan’s strong performance has been supported by major policy reforms, including continuous efforts to liberalise and simplify investment regulation which has helped spur capital inflows. Kazakhstan has also made important progress addressing poverty, however a significant proportion of the population still remains vulnerable on very low incomes.

Indeed, more remains to be done to fulfil Kazakhstan’s ambition of joining the top 30 most advanced economies by 2050. In order to achieve this goal, the government is engaged in ambitious reforms to improve the business environment and further reap the benefits of investment. In particular, Kazakhstan’s framework for investment takes on board a number of recommendations that were made in the context of the OECD’s first Investment Policy Review in 2012. Thus, in 2017, the OECD invited Kazakhstan to adhere to the OECD Declaration and Decisions on International Investment and Multinational Enterprises (henceforward the Declaration). Adherence signals Kazakhstan’s commitment to reform and its willingness to align with international best practices.

This second OECD Investment Policy Review of Kazakhstan recognises Kazakhstan’s achievements but also provides an independent view of what could be done better. In particular, the government will need to diversify the economy away from over-reliance on natural resources. When related activities are included, the oil and gas sector generates as much as 30% of GDP. Going forward, Kazakhstan would also benefit from increasing domestic entrepreneurship and strengthening competitiveness. It will also need to prove to investors that the institutional system is transparent and accountable.

The Review’s recommendations focus on the need to strengthen policy coherence and reform implementation through solid institutions and stronger co-ordination within government and with the business sector. It also stresses the need to maximise the benefits of investment by reinforcing linkages between foreign and domestic businesses, eliminating administrative barriers, reconsidering incentives policy, promoting responsible business conduct, and implementing clearer strategies for attracting investments that can support economic diversification and sustainable development.

The OECD and Kazakhstan’s Ministry for Investments and Development (MID) cooperated closely on this study. While the OECD brought its deep, inter-disciplinary expertise, the MID drove the cross-agency process, involving the private sector and civil society and providing critical inputs to the Review. The Review is an important element of a two-year programme to help Kazakhstan adopt OECD standards and thus provides an anchor for its policy reforms. Through this engagement, the OECD and Kazakhstan will continue to work together to design, develop and deliver better policies for better lives in Kazakhstan.

Zhenis Kassymbek, Minister for Investments and Development,Republic of Kazakhstan

Angel Gurría, Secretary-General, OECD