More than two-thirds of Western business leaders view Kazakhstan as an increasingly attractive investment destination due to political reforms
- A major YouGov survey highlights growing positive sentiment reflected in recent investment by international funds and businesses
- The ongoing reforms of President Kassym-Jomart Tokayev underpin increased investor confidence in 'New Kazakhstan'
LONDON, Nov. 16, 2022 /PRNewswire/ -- Two-thirds of Western business leaders believe constitutional reforms recently implemented by the President of Kazakhstan have made the country a more attractive investment opportunity, a new YouGov survey has revealed.
Some 69% of European and US business leaders said the reforms were positive for the country, which sits at a strategic economic crossroads at the heart of Eurasia. The study found that 77% believed the reforms would have a positive impact on democracy in the country. British and German business leaders were more positive about the benefits of the reform programme than their US counterparts.
Europe is Kazakhstan's biggest trading partner, and there are more than 4,000 companies with European connections currently operating in Kazakhstan. UK and Global businesses, including satellite company OneWeb – in which the UK government has a stake – and US technology group Honeywell, are the latest companies to start operations in the country.
The survey was undertaken between the 1st and 9th November 2022 with 350 business owners and/or board directors from companies from the USA, the UK and Germany with annual revenues of over £250m. It was conducted on behalf of The Chamber of International Commerce of Kazakhstan and found that 82% of the senior business leaders polled believed President Tokayev was prioritising the appropriate issues for reform, while 64% believed he was 'very' or 'quite' serious about improving human rights. That belief was strongest among US business leaders, where 72% perceived the Kazakh president as focused on human rights.
The constitutional reforms, which were overwhelmingly approved by 77% of the electorate in a national referendum in June, are just the start of a long-term trend to usher in a 'New Kazakhstan', according to President Tokayev.
Recognition of constitutional reforms addressing inequalities and driving investor appeal
The reforms are aimed at strengthening Kazakhstan's parliament while reining in presidential powers to remove 'oligarchic capitalism', root out corruption and enhance the lives of Kazakhstan's 19.4 million citizens. Since his election in 2019, President Tokayev has introduced measures to empower women, launched compulsory health insurance and boosted child benefit payments as he seeks to reduce inequality. His latest reforms include a pledge to protect human rights, restore a constitutional court and abolish the death penalty.
Of the five Central Asian republics that gained independence, Kazakhstan is the largest and wealthiest. It is roughly the size of Western Europe and is rich in 72 natural resources, with the biggest oil reserves of any former Soviet Union country, apart from Russia, and is currently benefiting from rising oil prices. Two-thirds of business leaders surveyed (67%) believe Kazakhstan's energy supplies could play an important role in solving the global energy crisis.
The YouGov survey is the latest study to highlight the growing appeal of Kazakhstan to foreign investors and businesses.
Kazakhstan's souring trade and prospects recognised by leading consultants, global investors, markets and think tanks
Foreign trade grew by 41% to $51 billion in the first five months of 2022, according to the Kazakh Bureau of National Statistics, while trade with the UK reached $1.8 billion, up 66% in the first seven months of the year. Foreign direct investment in Kazakhstan reached its highest level for a decade in the second quarter, at $7.58 billion, while leading institutional investors1, such as Franklin Templeton, Goldman Sachs and Citi have been meeting the country's leadership to learn more about potential opportunities.
The London Stock Exchange is also promoting the Kazakhstan's economic prospects, as the country embarks on a major privatisation programme and several key businesses, including Air Astana, in which Bae Systems holds a 49% stake, prepare to float. The exchange recently hosted its second Annual Kazakhstan Investment Forum in partnership with Kazakhstan's sovereign wealth fund Samruk-Kazyna.
A separate report, published this month, from consultants from EY entitled – With the global economy at a crossroads, which way will Central Asia go? – highlighted President Tokayev's "New Kazakhstan: The Path of Renewal and Modernization" development plan to restructure the economy. The report highlights the plan's key priorities, including raising economic growth and inclusion by promoting economic diversification, developing the private sector, reducing corruption and improving governance.
The Chamber's recent report, Is now the time to invest in Kazakhstan?, quotes several independent investors highlighting the country's potential:
Marius Dan, Franklin Templeton, said: "An exciting investment opportunity considering Kazakhstan's economic stability, abundant natural resources, strong commodity market fundamentals and the political and economic reforms by President Tokayev."
Roland Nash, VPE Capital, said: "It is a country with enormous potential driven by international trade. Its unique geographical position makes it extremely well placed to take full advantage of the rise of China/Asian trade but also the rapidly growing European demand for the vital commodities Kazakhstan produces."
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