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Kazakh Senate Deputy Olga Perepechina has named the main factors making Kazakhstan attractive for investors, Kazinform correspondent reports.
They are the political stability, predictability, and immutability of legislation, and effective governess across the country. The State keeps all these elements which are the solid foundation of investment climate under control. There are different legislative mechanisms for stimulating the investment activity in the country", - said Perepechina.
She went on to say that there are 14 special economic and 33 industrial zones, providing infrastructure and wider investment preferences, in Kazakhstan. The country also simplified the procedures for opening and running businesses, created a solid regulatory framework. And favorable conditions for investment activity.
Kazakhstan has passed the new investment policy concept, established a visa free regime with 76 countries, the institution of investment ombudsman.
According to Senate Deputy Olga Perepechina, the gross flow of direct foreign investments in Kazakhstan reached its 10-year high of $28bn in 2022.
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On the development of Kazakhstan's export potential told at a briefing in the Central Communications Service, Vice Minister of Trade and Integration Kairat Torebayev, press service of the Ministry of Trade and Integration reports.
According to the Vice Minister, the trade turnover of non-primary goods of Kazakhstan in January-July 2023 increased by 21.7% compared to the same period last year and reached 46.7 billion dollars. Exports of non-primary goods for 7 months of 2023 amounted to $ 14.2 billion. Exports of services increased by 16.7% compared to the same period of the previous year and reached $ 2.1 billion.
The top 3 non-resource exports include copper and copper cathodes (12.9% share), ferroalloys (10.2%), and uranium (9.4%).
We also observe a qualitative improvement in the diversification of the commodity basket, expansion of the export geography. The main markets traditionally remain Russia, China, Uzbekistan, Turkey and the Netherlands. At the same time, there is a significant growth of supplies to the EU, China and Central Asian countries", - said Kairat Torebayev.
The work on providing financial and non-financial support measures for exporters. To date, more than 100 companies have participated in international outbound trade events: these are trade and economic missions in 7 countries and an international exhibition in China. As a result of state support measures, export contracts worth more than 500 million dollars were concluded in the first half of 2023.
Separately, the Vice-Minister noted the legislative work to improve the export promotion ecosystem. He recalled that the Head of State in his Address emphasized the creation of a full-fledged export promotion institution with consolidation of all necessary tools on the basis of KazakhExport.
The Ministry of Trade and Integration has developed a draft law of the Republic of Kazakhstan on export credit agency issues. The bill is aimed at creating a special legal status of export credit agency, which will allow to unite the main measures of financial support and development of non-resource exports in the hands of ECA, which will act without a license for insurance and reinsurance", - said Kairat Torebayev at the briefing.
At present, KazakhExport, as an insurance organization, is not authorized to engage in any activities other than insurance and reinsurance. International experience shows that similar export credit agencies perform insurance, reinsurance, guaranteeing and financing of export operations.
In creating a Kazakhstani export credit agency, it is proposed that it be endowed with specific functions that will not overlap with the activities of other companies.
In addition, work is underway to create five cross-border hubs aimed at developing cross-border trade. These are the international center of industrial cooperation "Central Asia" in Turkestan region (Uzbekistan), the industrial trade and logistics complex in Zhambyl region (Kyrgyzstan), the center of cross-border trade "Eurasia" in the West Kazakhstan Region (Russia), the container hub "Caspian" in Mangystau region (countries of the Caspian region), the cross-border hub "Khorgos node" in Zhetysu region (China).
The creation of new production facilities on the basis of hubs together with border countries will contribute to the development of industrial cooperation and transport and logistics infrastructure. As a result, a significant increase in export supplies is expected, as well as the geography of sales markets for Kazakhstani goods will expand.
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At the meeting of the Interdepartmental Commission on foreign trade policy and participation in international economic organizations chaired by Deputy Prime Minister Serik Zhumangarin considered and made decisions on a number of significant issues, press service of the Ministry of Trade and Integration reports.
The issue of export duty on sunflower seeds was again heatedly discussed. At the previous two meetings of the Interdepartmental Commission, it has already been raised among the range of stakeholders: from producers and processors to government agencies and National Chamber of Entrepreneurs "Atamaeken". Having once again weighed all the results of the export duty and the current course of the state policy aimed at diversification of production in the country towards processing, the IMC meeting decided to leave the current export duty on sunflower seeds at the rate of 20%, but not less than 100 euros per ton, unchanged. The National Association of Oilseed Processors was proposed to reach a consensus with sunflower seed producers on purchase prices, which the Association undertook to publicly announce in the near future.
The most profitable business. According to the Office for National Statistics, growing sunflower seeds is one of the most profitable businesses in the Agribusiness sector. The overall profitability of this oilseed crop in the country is 96.4%.
Processing capacity. More than 50 enterprises are involved in sunflower seed processing in the country, with an annual total raw material processing capacity of 3.2 million tons. In 2022, the utilization of the existing sunflower processing capacity (2.8 million tons) was 34%. In 2022, the gross harvest of sunflower seeds amounted to 1.3 million tons, i.e. today there are already all prerequisites for full processing of oilseeds in the domestic market.
Sown areas are growing: from 960,400 ha in 2021 to 1 million ha in 2022 (14%) and 1.2 million ha in 2023 (6%). The average increase is 10% annually.
Sunflower seed exports are growing: 346.8 thousand tons of sunflower seeds were exported in 2022, which is 2.3 times higher than the level of the same period of 2021 (145.9 thousand tons). At the same time, the export of sunflower seeds in the marketing period (from October to August) 2020-2023, exceeds the average annual exports.
Vegetable oil production is growing: during the season (from September 2022 to August 2023) the production of unrefined oil exceeded 417 thousand tons, which is 50% more than in the season 2021-2022 (279 thousand tons). Refined oil production rose 4.1% to 145,300 tons during the same time. Imports of bottled sunflower oil decreased: from September 2022 to July 2023 imports amounted to 35.2 thousand tons, a decrease of 15%. Thus, the growth of production is against the background of a reduction in imports, i.e. import substitution is taking place.
Exports of processed products are growing. For 2022, 229.4 thousand tons of sunflower oil worth $319.7 million were exported, which is almost 3 times higher than the level of 2021 (84.9 thousand tons worth $98.8 million).
The price of oil in stores is decreasing. Export duty was introduced on February 4, 2023, from January to September the average price of sunflower oil in the country decreased by 16%. As of September 12 this year, the average price was 764 tenge.
Receipts to the budget. The volume of duties paid for the export of sunflower seeds to the country's budget, from which further agricultural producers receive subsidies, amounted to 4.2 billion tenge.
Limiting the export of raw materials and increasing the volume of processing is a global trend in the economies of neighboring countries. Such states as Kyrgyzstan, Uzbekistan, Tajikistan, which have practically no raw materials of their own, create favorable conditions for the supply of raw materials and build processing facilities. Kyrgyzstan has a zero rate of Value Added Tax on import of sunflower seeds exclusively for vegetable oil production. Uzbekistan has a zero duty on imports of sunflower seeds and sunflower oil. As a result, import of sunflower seeds from Kazakhstan takes the first place annually in the structure of Uzbekistan's imports. At the same time, countries producing their own raw materials, such as Russia and Belarus, extend export duties and introduce export licensing.
In addition, at the meeting the Interdepartmental Commission decided to extend the ban on coal export by motor vehicles. This is due to the upcoming start of the heating season, for uninterrupted supply of social coal to the population. In order to ensure uninterrupted gas supply to the population and deliveries to the automobile market, a restriction on the export of liquefied petroleum gas by road and rail transport was established.
Also at the meeting, the Interdepartmental Commission discussed the issue of abolishing the export duty on lubricating oils, considered the extension of the anti-dumping measure against cold-deformed seamless stainless steel pipes and other issues of foreign trade activities.
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The volume of investments of the Eurasian Development Bank (EDB) in Kazakhstan in the first two years of implementation of the Strategy for 2022-2026 years may exceed the plan by 70% and amount to more than $2.2 billion. This became known during a meeting of Prime Minister of Kazakhstan Alikhan Smailov with the Chairman of the Board of the Bank Nikolai Podguzov, primeminister.kz reports.
Nikolai Podguzov emphasized that Kazakhstan is a leader in the volume of investments attracted from the EDB. Thus, 104 projects worth $5.6 billion have already been implemented in various sectors. This includes the construction of solar and wind generation, modernization of enterprises in the manufacturing sector, chemical industry, cogeneration plants, street lighting networks, as well as the renewal of the fleet of railway rolling stock, development of companies in the agro-industrial complex sector, construction of airports, main gas pipelines, etc.
In June this year, traffic was opened on the Big Almaty Ring Road, which was built with EDB financing in partnership with the European Bank for Reconstruction and Development and the Islamic Development Bank. Currently, the EDB together with international partners is financing the expansion and modernization of Almaty Airport. Along with these promising projects are the construction of the Ayagoz-Bakhty railroad line and a new border crossing on the Kazakhstan-China border. The new infrastructure is expected to increase cargo turnover by 20 million tons per year.
In addition, the Bank intends to participate in the reconstruction and expansion of the main water pipeline "Astrakhan - Mangyshlak". Taking into account the high social significance of the project it is planned to provide special financing terms.
Alikhan Smailov noted the important role of EDB in the infrastructural development of the republic and emphasized the correctness of the Bank's approach, taking into account the goals of national development of the Republic of Kazakhstan.
For reference: Eurasian Development Bank is an international financial organization that carries out investment activities in the Eurasian space. For more than 17 years EDB has been promoting the strengthening and expansion of economic ties and comprehensive development of member countries. The EDB's authorized capital is $7 billion. The main share of the EDB's portfolio is occupied by projects with integration effect in the areas of transport infrastructure, digital systems, green energy, agriculture, industry and mechanical engineering. The Bank's activities are guided by the UN Sustainable Development Goals and ESG principles.
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The issues of taking antimonopoly measures in the areas of oil production and transportation, health care and operation of railway infrastructure were discussed at the Economic Demonopolization Commission headed by the Prime Minister of the Republic of Kazakhstan Alikhan Smailov, primeminister.kz reports.
Thus, the activity of a private company owning an oil pipeline, through which raw materials from one of the fields are sent to the bitumen plant for processing, was considered. There are no similar pipelines on this route, which makes it impossible to transport oil by an alternative route.
Taking advantage of its monopoly position, the company set a tariff for services 30 times higher than the tariffs used for oil transportation for similar distances by other market participants.
As a result of the discussion, authorized government agencies are instructed to analyze the validity of the established prices and take the necessary measures through the Committee for Regulation of Natural Monopolies Ministry of National Economy of the Republic of Kazakhstan.
The meeting also considered the issue of returning a number of services provided to the Atyrau Refinery and Petrochemical Plant under outsourcing to the competence of the plants themselves. In particular, it was noted that the first phase of transferring the functions of maintenance of automatics and pipelines, water supply and plumbing services to the enterprise was completed at Petrochemical Plant. At present, similar work is being done on construction and installation services, maintenance of electrical equipment, power grids and ventilation, shipper services, etc. It should be completed by the end of the current year.
Along with this, the participants discussed the issues of transfer of the enterprise, working in the field of equipping medical organizations with equipment and machinery, from trust management to the Ministry of Healthcare, as well as the operation of railway access roads, previously returned to the state ownership.
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Today Deputy Prime Minister - Minister of Finance of the Republic of Kazakhstan Yerulan Zhamaubayev held a meeting with the General Director of the Singapore company "Surbana Jurong Group" Mr. Sean Chao, primeminister.kz reports.
During the meeting they discussed topical issues of cooperation in such spheres as electric power, renewable energy sources, transportation infrastructure, water supply.
Yerulan Zhamaubayev noted that in 2022 trade turnover between the two countries increased by 65.1% compared to 2021 and reached $1.9 billion. There is a steady growth of investment of Singaporean capital in the economy of Kazakhstan. For the first quarter of 2023 attracted $ 92.2 million. Less than 20 years from Singapore attracted $ 1.2 billion.
The Head of the Ministry of Finance also emphasized that today in Kazakhstan there are more than 200 operating enterprises with the participation of Singaporean capital.
We will continue to take all possible measures to promote the inflow of foreign investment to remain an investment leader in Central Asia," Yerulan Zhamaubayev said.
In addition, the Deputy Prime Minister outlined the importance of Singapore as a major partner in Southeast Asia.
For his part, Sean Chao emphasized that the regions of Kazakhstan and Singapore are linked by many years of close cooperation in various areas. At the same time, there is a significant potential for its expansion
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This was agreed by the Minister of Trade and Integration of Kazakhstan Arman Shakkaliev during a roundtable with major Chinese entrepreneurs, press service of the Ministry of Trade and Integration reports.
Business negotiations with business captains took place within the framework of trade and economic mission of Kazakhstani commodity producers to the city of Wuhan, Hubei Province. The parties discussed current areas of cooperation, presented their export and investment potential. The Hubei Provincial E-Commerce Association voiced its proposals on transformation of the e-commerce sector.
As the Minister of Trade and Integration noted, the relations between Kazakhstan and China are dynamically developing in all directions. In August, Deputy Prime Minister Serik Zhumangarin held meetings with representatives of Chinese business in Shenzhen and Beijing. Return visits of business circles of Shanxi and Shandun provinces in Astana have already been made.
Today Kazakhstan and China are closely cooperating on 52 joint projects in various sectors of the economy worth over 20 billion dollars. Mutual work is underway in the field of industrialization and investment.
The key sectors identified for attracting investors are agribusiness, processing and logistics, and digital trade. For companies that want to invest, our country has a large-scale package of incentives, which provides for the allocation of land plots for the construction of industrial facilities, tax exemption for up to 10 years, quotas for the import of labor and other preferences. Taking into account the profiles of your companies, we can also offer opportunities to invest in the economy of Kazakhstan", - Arman Shakkaliev addressed the participants of the round table.
The minister noted that the state is very interested in attracting foreign investment in the country.
We are committed to developing the regions of our country. If there is a focused interest in a certain area of Kazakhstan, we are ready to work out promptly on the ground all arising issues on investment projects and related processes. This will be more effective and faster", - said Arman Shakkaliev.
About 20 Chinese companies from various fields, including mineral processing, business services and wholesale trade, construction and operation of energy facilities, solar panel manufacturing, transportation management, cargo warehousing, and e-commerce participated in the talks.
At the meeting, the parties agreed to identify promising projects for early implementation and quick results. QazTrade Trade Policy Development Center together with the Association of Entrepreneurs of Hubei Province will have to develop a plan of concrete actions on export-import of products.
Also, the Minister of Trade and Integration Arman Shakkaliev asked the representatives of the Association to assist Kazakh companies in finding markets. In response, Zhang Fancheng, representative of the Association of Entrepreneurs of Hubei Province, proposed to conduct a marketing campaign for Kazakhstani enterprises so that as many potential partners in China as possible could get an idea of the capabilities of our manufacturers and Kazakhstani brands.
The trade mission of Kazakhstani entrepreneurs to the city of Wuhan, Hubei Province, takes place from September 14 to 16. Business negotiations in B2B format, visits to enterprises, signing of export agreements are planned within the framework of the event.
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The issues of realization of new tasks within the framework of IT-industry development were considered at the Government session under the chairmanship of the Prime Minister of the Republic of Kazakhstan Alikhan Smailov, primeminister.kz reports.
Minister of Digital Development, Innovation and Aerospace Industry Bagdat Mussin noted that currently the state policy is aimed at intensive development of the innovation ecosystem in the Republic of Kazakhstan. This includes measures to improve the quality of human capital, create IT infrastructure and venture funds, attract foreign technology companies and create favorable conditions for local startups.
In recent years, as a result of the proactive policy of the state, there has been a sharp increase in interest in the IT sphere. In particular, the number of students at the relevant faculties in universities is increasing. Modern IT schools supplement the personnel base necessary for the creation of innovative economy. Under the TechOrda program, Kazakhstan residents can study in advanced private IT-schools under the voucher system. In the future, in order to improve the quality of education, the issues of allocation of vouchers for the training of teachers and the introduction of quality standards at IT-faculties will be worked out.
The Minister noted that in order to increase the export of Kazakhstan IT services, Silkroad hub representative offices will be opened in South-East Asia and the Middle East in the near future. Also for attraction of qualified specialists the project Digital Nomad Visa will be realized.
In parallel, the work on opening new technological hubs in the regions of the country will continue. To date, 9 sites have already been opened, by the end of the year it is planned to launch 4 more hubs.
It was noted that today 24 venture funds work in the market of Kazakhstan, which have already invested in startups $145 million. However, despite the growth in the number of venture agreements, there is a shortage of funds. In this regard, the Ministry together with market representatives will develop legislative initiatives that will remove restrictions in the venture capital industry.
At the same time, the development of the sphere of artificial intelligence will continue, the Caspian optical infrastructure and data processing centers meeting international standards will be put into operation. It is also planned to create a special economic zone for IT-investors.
During the meeting the akim of Karaganda region Yermaganbet Bulekpayev informed about the work of regional IT-hubs. In addition, Mirat Akhmetsadykov, head of the Most Hub private technopark, and Maksat Kadyrov, co-founder and technical director of the Kwaaka startup, made speeches.
Prime Minister emphasized that today IT-industry is one of the fastest growing in the world economy. Thus, according to experts, this year the volume of the global IT market will reach $4.5 trillion.
In his Address, the Head of State set the task to bring the export of IT services to $1 billion by 2026. This is quite a realistic goal," Alikhan Smailov said.
He noted that in recent years Kazakhstan has made a significant leap in the development of the IT sector. Large global companies and investors are attracted. Favorable conditions for local startups are created.
Only for 3 years the export of IT-services has increased 5 times. At the end of this year it can reach $500 million. IT-hubs and venture capital funds should become the main drivers in achieving this task," Prime Minister said.
Prime Minister also emphasized the need for training of highly qualified specialists in this industry. In this regard, it is required to further develop educational programs, to attract big business for this purpose.
World trends are changing rapidly. To date, artificial intelligence neural networks are actively developing. Even today, many of them not only generate texts and create images, but also write programs several times faster than humans. According to a McKinsey study, by 2030, artificial intelligence will take over most routine operations. In this regard, it is necessary to properly build education and IT-infrastructure," Alikhan Smailov pointed out.
According to him, Kazakhstan should strive to become a full member of the world IT-market. For this purpose it is necessary for each region to have its own IT-hub and modern IT-schools.
There are successful examples. Regional IT-hubs and schools are functioning in Almaty and Karaganda region. It is necessary to scale their experience to other regions," Prime Minister emphasized.
He added that there are also questions on the development of startup projects. In general, at the initial stage there is a whole line of support measures for them, but with the expansion of business there are problems with lack of capital and, as a consequence, the development of the project.
Because of this, many of them remain at the project level. This hinders the development of the IT industry. The export potential of the industry is lost. Here it is necessary to involve big business, banks, venture funds and other instruments. We must use all available opportunities and resources," Alikhan Smailov said.
According to the head of the Government, IT-schools should be created for training and retraining of programmers, designers, engineers and other specialists of this sphere, the training program for IT-specialists should be made more flexible so that it could follow the world trends, as well as programs for exchange of students and experience, internships with leading universities should be established.
In conclusion, Prime Minister instructed to develop amendments to legislation to ensure the development of venture capital financing taking into account international experience and to provide approaches to financing startup projects at the expense of subsoil users' funds allocated for research and development.
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The results of the social and economic development and implementation of the republican budget for Jan-August were considered at a Government session under the chairmanship of Prime Minister of Kazakhstan Alikhan Smailov, primeminister.kz reports.
As Deputy Minister of National Economy Azamat Amrin reported, Kazakhstan's economy grew by 4.9% during the reporting period. In particular, growth in the real sector amounted to 4.4%, in services amounted to 4.8%. In all major industries are positive dynamics, with the best performance demonstrated by construction, trade, information and communication.
The growth rate of investments in fixed assets amounted to 12.2%. Their inflow increased in such spheres as transportation and warehousing by 49%, education 31.9%, trade 30.1%, agriculture 20.7%, industry 8.5%.
In Jan-July, the foreign trade turnover of the republic increased by 5.7% and amounted to $79.5 billion. Exports reached $44.8 billion, including exports of processed goods amounted to $14.2 billion, and imports to $34.7 billion. In general, the positive trade balance is $10 billion.
According to Deputy Prime Minister - Minister of Finance Yerulan Zhamaubayev, during the reporting period the state budget received 12.5 trillion tenge of revenues (the plan was fulfilled by 97.2%). Thus, the republican budget was replenished by 8.3 trillion tenge, local budgets by 4.2 trillion tenge. State budget expenditures were executed by 98.6%, republican budget by 99.3%, local budgets by 98.3%.
Prime Minister noted that the real sector continues to make a significant contribution to GDP growth. For example, the mining industry grew by 4.3% due to an increase in oil production by over 6% and natural gas production by over 3%.
In manufacturing, growth exceeded 3%. In particular, there is an intensive increase in production in the machine building industry by more than 28%, including in the automotive industry by over 42%.
Also high dynamics in the manufacturing sector was shown by light industry - by almost 20%, production of rubber and plastic products - by over 7%, finished metal products by over 6%, foodstuffs by 4% and chemical industry by over 3%.
Prime Minister added that high growth rates were ensured in the construction sector by 11.4%. In general, almost 10 million square meters of housing was commissioned.
According to the results of 8 months, positive dynamics is noted in West Kazakhstan, Kostanay, Kyzylorda, North Kazakhstan regions, the cities of Almaty and Shymkent on all major indicators.
Other regions need to ensure the achievement of target indicators," Prime Minister pointed out.
Due to the measures taken by the results of August there is a decrease in inflation to 13.1%. In this regard, state bodies and regional akimats have been instructed to continue active work on stabilization of prices for food products and stimulation of food production.
The Head of State in his Address set the task to ensure economic growth of the country at the level of 6-7% in the medium term. This is a serious challenge for the Government and akimats. We all need to take effective measures to accelerate growth in key sectors of the country's economy," Alikhan Smailov said.
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