Kaza­khstan: Land of Im­mense Nat­u­ral Re­sources

The Diplomatic Insight - - Editor’s Desk - 13

The var­ied land­scape stretches from the moun­tain­ous and heav­ily pop­u­lated re­gions of the south-east to the sparsely pop­u­lated, en­ergy rich low­lands in the west and from in­dus­tri­al­ized north, with its Siberian cli­mate ter­rain through the arid, empty steppes of the cen­tre to the fer­tile south. It has Rus­sia and China at its neigh­bors while with hav­ing a neu­tral and ex­cel­lent for­eign pol­icy with all its neigh­bors and ex­tended re­gional play­ers. Since In­de­pen­dence in 1991, Kaza­khstan pur­sued what is known as “Mul­tivec­tor For­eign Pol­icy” which is based on friendly and equal re­la­tions with the all in ev­ery field. This pol­icy has re­mained suc­cess­ful that since then ev­ery oil and gas sec­tor com­pany from US, Rus­sia, China and Europe is will­ing to in­vest in the sec­tor. This has also helped Kaza­khstan to re­al­ize the dream of mak­ing its oil and gas to be ex­ported through pipe­lines out of Kaza­khstan in the re­gion and be­yond. And this pol­icy of friendly co­op­er­a­tion helped build­ing the eco­nomic base of the coun­try on a solid foot­ing. Kaza­khstan is one of the largest economies of the Cen­tral Asian re­gion. It is a huge coun­try equiv­a­lent to Western Europe and has vast min­eral re­sources, enor­mous eco­nomic po­ten­tial, rich tra­di­tions, cul­ture and his­tory. Kaza­khstan looks for the eco­nomic se­cu­rity of the re­gion and as­pires to build high­ways and pipe­lines from East to West thus cre­at­ing mod­ern Silk Road to en­cour­age com­merce. The coun­try also en­cour­ages ex­port its rich en­ergy re­serves and re­sources to share with the world. Quite re­cently it has taken over the lead­er­ship of the Or­gan­i­sa­tion for Se­cu­rity and Co-op­er­a­tion in Europe. Kaza­khstan is the best ex­am­ple of the re­gion's po­ten­tial eco­nomic dy­namism as it has moved it­self to a place of amongst­world's top en­ergy pro­duc­ing na­tions. Kaza­khstan has at­tracted for­eign in­vest­ment, cre­ated jobs, and es­tab­lished a bank­ing sys­tem that is a model for the re­gion. The gov­ern­ment is work­ing to di­ver­sify the coun­try's econ­omy and en­sure that its oil wealth ben­e­fits more than just a few. Kaza­khstan has at­tracted mas­sive in­vest­ment in var­i­ous sec­tors and one of the ma­jor rea­sons for this at­trac­tion is its huge trans­porta­tion net­work and base along with telecom­mu­ni­ca­tion sys­tem which is the need of the in­dus­tries and over­all busi­ness cli­mate. The coun­try also has skilled la­bor force and has also in­vested in in­fras­truc­tural in­vest­ment. The trans­porta­tion in­fra­struc­ture in Kaza­khstan con­sists of an ever-ex­pand­ing web of pipe­lines, rail­ways, aerial routes, wa­ter trans­port routes, high­ways, and mail routes, rapidly cross­ing Cen­tral Asia for the bet­ter­ment of cit­i­zens, busi­ness part­ners, and trav­ellers alike. The dis­per­sion of nat­u­ral re­sources and cen­ters of eco­nomic ac­tiv­ity make the trans­port sec­tor a most im­por­tant one for the well be­ing of the na­tional econ­omy, par­tic­u­larly in or­der to spur in­vest­ment in Kaza­khstan's promis­ing agri­cul­tural sec­tor and re­gional mar­kets. In an ef­fort to create favourable con­di­tions for for­eign and do­mes­tic in­vestors, goal-ori­ented and con­sis­tent in­vest­ment poli­cies are pur­sued within the trans­port sec­tor with strong in­cen­tives for the at­trac­tion of direct in­vest­ment in all ar­eas of in­fra­struc­ture and com­mu­ni­ca­tion com­plex. The gov­ern­ment is pro­vid­ing strong in­cen­tives for the at­trac­tion of direct in­vest­ment in all ar­eas of in­fra­struc­ture, as in­fra­struc­ture has be­come a top pri­or­ity. A com­pet­i­tive en­vi­ron­ment ex­ists to­day, is be­ing fos­tered fur­ther, and with some ex­cep­tions, mo­nop­o­lies are re­stricted in or­der to en­cour­age an open and ef­fi­cient trans­porta­tion and com­mu­ni­ca­tion ser­vices mar­ket. Kaza­khstan is im­por­tant toworld en­er­gy­mar­kets be­cause it has sig­nif­i­cant oil and nat­u­ral gas re­serves. Within the next decade Kaza­khstan would be­come one of the world's largest oil pro­duc­ers and ex­porters. But Kaza­khstan's strate­gic as­pi­ra­tion is to be­come a mod­ern, di­ver­si­fied econ­omy with a high value added and high-tech com­po­nent, well in­te­grated into the global econ­omy. En­ergy sec­tor is viewed as a good ba­sis to achieve this goal. As the pri­mary task of the Gov­ern­ment in the near­est and mid-term fu­ture will re­main the con­tin­u­a­tion of struc­tural and in­sti­tu­tional re­forms aimed at de­vel­op­ing com­pe­ti­tion, im­prove­ment of in­vest­ment cli­mate, strength­en­ing of trans­parency and lib­er­al­iza­tion of the econ­omy, im­prove­ment of ju­di­cial sys­tem, dereg­u­la­tion of the mar­ket. The gov­ern­ment will also fo­cus on fur­ther im­ple­men­ta­tion of the In­dus­trial-In­no­va­tiveDevel­op­ment Strat­egy through an ac­cel­er­ated di­ver­si­fi­ca­tion and mod­erni­sa­tion of the pro­cess­ing in­dus­trial sec­tor and ser­vices. The fol­low­ing mea­sures will be taken to ad­dress this task: the main in­dus­trial stock­will be up­dated and the real econ­omy sec­tor will be tech­ni­cally rearmed, the pro­duc­tiv­ity will be in­creased by means of in­tro­duc­ing sci­en­tific achieve­ments and in­no­va­tions, the en­ergy con­sump­tion will be low­ered by means of in­tro­duc­ing re­source and en­ergy sav­ing tech­nolo­gies, cap­i­tal and tech­nolo­gies of multi­na­tional for­eign com­pa­nies will be at­tracted into the econ­omy. In or­der to achieve th­ese tasks far-reach­ing mea­sures will be taken. Among them will be im­prove­ment of tax (low­er­ing of VAT, cor­po­rate and so­cial taxes), bud­get and mon­e­tary-cred­it­ing sys­tems. From the year 2007 li­cens­ing of hard cur­rency op­er­a­tions will be abol­ished and repa­tri­a­tion of cur­rency earn­ings will be fixed through the

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