Kazakhstan: President Tokayev empowers Investment Council further to boost economic growth

The decree outlines a comprehensive plan to empower the Investment Promotion Council (Investment Headquarters) with unprecedented authority.

As stipulated in the decree, the Investment Promotion Council will have the power to make binding decisions on both central and local government bodies and entities in the quasi-public sector. Additionally, the Council is empowered to develop temporary regulatory legal acts with the force of law, supplementing the government’s efforts to create a conducive environment for investment.

According to Kazinform, this decree is a continuation of President Tokayev’s economic policy, as outlined in his state-of-the-nation address in September. This policy focuses on economic reforms, diversification, transparent tax policies, and equitable management practices.

Tokayev has consistently demonstrated a proactive approach to attracting foreign investment and strengthening economic ties globally, the paper reported.

He often engages in meetings with investors, both domestic and foreign, particularly during official visits abroad. A recent example of such diplomatic engagement occurred during the Conference of the Parties of the United Nations (UN) Framework Convention on Climate Change (COP28) in Dubai, the United Arab Emirates (UAE).

There, Tokayev met with UAE Minister of Investment, Mohammed Al-Suwaidi. During their discussion, they explored potential collaboration on joint projects between UAE’s Presight AI Holding and Samruk-Kazyna Sovereign Wealth Fund, as well as strategic agreements involving QazaqGaz and Kazakhstan Temir Zholy focusing on artificial intelligence. Overall, Kazakhstan signed 20 agreements with foreign companies worth $4.85 billion in green energy, infrastructure, and digitization on the sidelines of COP28. The enhancement of the investment policy reflects a key component of Tokayev’s broader economic strategy.

Andrey Chebotarev, author of the Finance.kz Telegram channel, praised the President’s initiative. “With the need to modernize the energy system, pursue ambitious industrialization plans, and maintain strict monetary policy, Kazakhstan urgently requires these investments,” he said.

The strengthened powers of the Investment Headquarters come as part of a broader strategy to enhance the investment climate in Kazakhstan. Recent amendments to the Tax Code and corresponding changes to the Government Decree on State Support for Investments have already provided investors with increased flexibility in choosing investment directions and fostering active participation in various sectors of the economy.

The Investment Headquarters has been granted the authority to propose disciplinary actions, including the dismissal of heads of government bodies and quasi-public sector entities for non-compliance with its decisions. This enhanced oversight is intended to ensure strict investment initiative adherence and bolster investor confidence.

Astana is the vibrant capital of Kazakhstan. Photo courtesy:  

Chebotyrev emphasized the need for appropriate legislative amendments, stating, “Investments come when investors have firm confidence in the successful completion of all plans and projects. Investments always mean new jobs, new knowledge, and new technologies. These are new opportunities for the citizens of the country.”

According to the World Investment Report 2023, published by the UN Conference on Trade and Development, Kazakhstan saw an 83% increase in net foreign direct investment (FDI) flows, reaching $6.1 billion, despite a sharp decrease in global investment flows in 2022. Kazakhstan is leading in attracting FDI among post-Soviet Central Asian countries, securing a 61% share.

Chebotyrev points to data from the National Bank, illustrating a steady FDI influx into the Kazakh economy. Specifically, in 2021, the figure reached $23.8 billion, surpassing $28 billion in 2022 and registering $13.3 billion for the first half of 2023. According to the expert, these investments are predominantly directed towards extracting raw materials.

“Breaking down the numbers for 2022, the oil and gas sector secured the lion’s share, attracting $9.6 billion in investments. Metallurgy followed with just over $4 billion, while the electricity sector received $635.6 million, and the food and beverage production sector obtained a more modest sum of $177.9 million,” he wrote.

In this regard, the President’s decree aims to redirect investment into key sectors, particularly manufacturing, to ensure the sustainable development of the economy. The measures outlined in the decree are expected to streamline decision-making processes, promote accountability, and create a more favorable investment environment for both domestic and foreign investors.

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