Nazarbayev Pushes for Foreign Investors to Diversify the Economy
At a meeting of foreign investors, Kazakhstani President Nursultan Nazarbayev urged attendees to reinvest their profits into other sectors of the economy in an effort to diversify the resource-dependent nation, and promising that the government would do everything it could to form the “most attractive, comfortable conditions.”
The petroleum sector of the country is dominated by Western majors, as well as by firms from Russia, Kazakhstan’s largest trading partner, and along with the mining sector has seen the lion’s share of the over US$50 billion in foreign direct investment since the country gained independence in 1991. Nonetheless, disagreements have occurred between the government and investors in the past, most notably that over the Kashagan oilfield in 2007-08, as well as the highly disputed takeover battle of PetroKazakhstan by China National Petroleum Corporation (CNPC) in 2005, among others.
The President set out to alleviate any fears investors might have by assuring them that the country “was and remains committed to the principle of a market economy, the protection of the rights of private ownership and the independence of signed contracts.”
Bakhyt Sultanov, Kazakhstan’s Economy Minister stated that the government was working on improving transparency and corporate standards among local companies, as well as trying to help foreigners enter the domestic market. With industrial production down by 4.6% over the first five months of the current year, after having grown by 3.8% in the same period in 2008, as well as a generally stagnating economy, the government is trying to reduce the effects of the recession it already expects to hit this year, according to Reuters, Alexander’s Gas & Oil Connections and Petroleum Economist.