of October 18, 2024 No. 868
About approval of the Concept of investment policy of the Republic of Kazakhstan till 2029
The government of the Republic of Kazakhstan DECIDES:
1. Approve the enclosed Concept of investment policy of the Republic of Kazakhstan till 2029 (further – the Concept).
2. To the central and local executive bodies, state bodies, directly subordinate and accountable to the President of the Republic of Kazakhstan (under approval), and also to other organizations (under approval), responsible for execution of the Concept:
1) to provide timely implementation of actions and achievement of the indicators provided by the Action plan on implementation of the Concept;
2) two times a year, no later than January 15 and on July 15, following reporting half-year to provide information on course of execution of actions of the Concept in the Ministry of national economy of the Republic of Kazakhstan.
3. No later than June 1 to provide to the ministry of national economy of the Republic of Kazakhstan following the results of year in the Government of the Republic of Kazakhstan summary information on the course of implementation of the Concept.
4. Declare invalid the order of the Government of the Republic of Kazakhstan of July 15, 2022 No. 482 "About approval of the Concept of investment policy of the Republic of Kazakhstan till 2026".
5. To impose control of execution of this resolution on the Ministry of national economy of the Republic of Kazakhstan.
6. This resolution becomes effective from the date of its signing.
Prime Minister of the Republic of Kazakhstan
O. Bektenov
Approved by the Order of the Government of the Republic of Kazakhstan of October 18, 2024 No. 868
Section 1. |
Passport |
Section 2. |
Analysis of the current situation |
Section 3. |
Overview of the international experience |
Section 4. |
Vision of development of investment policy in Kazakhstan |
Section 5. |
Basic principles and approaches of development |
Direction 1. Further development of ecosystem of investment attraction | |
Direction 2. Assistance to development of institutional framework and infrastructure | |
Direction 3. Disclosure of investment potential of economy | |
Section 6. |
Target indicators and the expected results |
Section 7. |
The action plan on implementation of the Concept of investment policy of the Republic of Kazakhstan till 2029 |
Name |
Concept of investment policy The Republic of Kazakhstan till 2029 |
Bases for development |
The presidential decree of the Republic of Kazakhstan of November 26, 2022 No. 2 "About measures for implementation of the election programme of the President of the Republic of Kazakhstan "Fair Kazakhstan – for all and for everyone. Now and forever"; The presidential decree of the Republic of Kazakhstan of September 16, 2023 No. 353 "About measures for implementation of the Message of the Head of state to the people of Kazakhstan of September 1, 2023 "Economic course of Fair Kazakhstan"; The presidential decree of the Republic of Kazakhstan of December 4, 2023 No. 404 "About measures for increase in overall performance for investment attraction in national economy"; the minutes of Council for investment attraction of February 2, 2024 No. D-1016//12-04/05-3874. |
State body responsible for development of the Concept |
Ministry of national economy of the Republic of Kazakhstan |
State bodies responsible for implementation of the program document |
The central and local executive bodies, state bodies, directly subordinate and accountable to the President of the Republic of Kazakhstan (under approval), and also other organizations (under approval) |
Kazakhstan achieved considerable success in creation of market economy from the moment of independence finding. The country attracted considerable foreign investments for development of the extensive mineral, oil and natural gas resources. According to the Conference of the United Nations on trade and development (further – UNCTAD) from 1991 to 2023 the amount of net inflow of direct foreign investments (further – PII) to Kazakhstan made more than 166 billion dollars (0,5 of % of world PII).
In spite of the fact that extensive inventories of hydrocarbons and minerals remain the basis of the economy of Kazakhstan, the Government continues to make efforts for diversification of economy, supports active dialogue with all investors via formal channels, such as Council of foreign investors in case of the President of the Republic of Kazakhstan and Council for investment attraction under the leadership of the First deputy Premier-Ministra of the Republic of Kazakhstan. Kazakhstan is member of the World Trade Organization (further – the WTO) and the Eurasian Economic Union.
According to forecasts of the international rating agency "Standard&Poor" s" (further – the S&P Agency) the annual average gross domestic product growth (further – GDP) Kazakhstan during the period from 2024 to 2027 will constitute % 3,6. On March 1, 2024 the S&P Agency confirmed credit rating of Kazakhstan at the level of "BBB-" with the "Stable" forecast. The key factors supporting the rating of Kazakhstan are strong fiscal incentives (tax benefits, subsidies, grants, etc.) and availability of quick external assets.
The S&P agency notes that there is possibility of increase in credit rating of Kazakhstan in case of successful carrying out the reforms stimulating growth of not oil sector, political stability and decrease in geopolitical risks.
In May, 2024 confirmed with the international rating agency Fitch Ratings (further – the Fitch Ratings Agency) long-term issuer default rating of Kazakhstan in foreign currency at the level of VVV with the "Stable" forecast. This decision is based on strong fiscal and external balances of the country which remain steady against external shocks. Cumulative export earnings of oil and availability of fiscal base play key role in maintenance of these indicators.
The Fitch Ratings agency notes considerable dependence of Kazakhstan on primary goods, high inflation and weak indicators of public administration which influence decrease in overall assessment. Also emphasize the risks connected with concentration of export and less developed macroeconomic policy in comparison with the comparable countries with "BBB" rating with the "Stable" forecast.
The Fitch Ratings agency predicts acceleration of GDP growth of Kazakhstan to 5% in 2025 thanks to growth of investments, increase in consumption and extension of the project Tengiz. At the same time inflation according to forecasts will decrease to % 9,5 in 2024 and 8% in 2025. The Fitch Ratings agency also expects that measures for diversification of economy and development of transport infrastructure will promote long-term and strong growth of the country.
According to these UNCTAD global flows of PII in 2023 increased by 3% to 1, of 37 trillion US dollars mainly due to growth of investments into Luxembourg and the Netherlands. Excepting these countries, global flows of PII decreased by 18%.
In the conditions of geopolitical tension and economic uncertainty flows of PII to developing countries were reduced by 9% to 841 billion US dollars. The greatest decrease is observed in the developing countries of Asia – for 12% (in People's Republic of China (further – the People's Republic of China) for 6%, the countries of Association of South-East Asian Nations for 16%). At the same time PII in developed countries increased by 29% to 524 billion US dollars. Without Luxembourg and the Netherlands amounts of PII in the developed markets decreased by 28%.
In 2023 amounts of PII to Central Asia decreased by 5% to 10 billion US dollars. However the number of Greenfield of projects increased more than by 3 times to 158 projects.
Despite geopolitical situation, in 2023 growth of number of projects in global chains of value added (+16%), especially in the automotive, textile, mechanical and electronic industry is observed. At the same time the number of Greenfield of projects on production of semiconductors decreased by 10% (for 39% on amount of attachments) after considerable increase in 2022.
Investments into the sectors connected with sustainable development goals (infrastructure, transport and logistic complex, etc.), continue to grow, especially in developing countries (+6%). At the same time the international transactions on project financing in the sector of renewable power were reduced by 10% on amount of attachments for the first time after the Parisian agreement of 2015. At the same time the amount of the international financial transactions in the field of oil and gas decreased by 20% to 73 billion US dollars.
The main trends in investment policy
Long-term stagnation of PII
Despite growth of world GDP, since the beginning of the 2010th years the amount of PII stagnated because of restructuring of global supply chains. Economic instability, strengthening of protectionist measures and political uncertainty in key economies reduced level of credibility of investors. Technology changes and regulatory toughenings increased uncertainty for foreign investors. These factors in total led to the fact that many companies became more careful in decision making about investment abroad.
Tendency to strengthening of regulation of PII
Need of protection of national interests against the background of geopolitical and economic uncertainty led to toughening of regulation of PII both in developed, and in developing countries. For example, India toughened rules for foreign investments to defense and space sectors, requiring preliminary government approval. Vietnam implemented the new Law "About Investments" strengthening control of foreign investments in the sectors important for homeland security, such as telecommunication and high technologies. The countries of the European Union implemented obligatory check of the investments posing threat of homeland security or to public order.
The growing importance of services and deglobalization of processing industry
The specific weight of Greenfield of projects in the field of services in 20 years grew from 66% to 81%, including investments into traditional industries of services (banking sector, consulting, digital technologies) and services entering primary branches of production.
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