JEDDAH, 19 January 2004 — Kazakhstan’s Foreign Minister Dr. Kassymzhomart Tokayev set out his stall with a vivid display of the opportunity and potential available in the former Soviet republic. Reeling off figures and bureaucratic deals, Tokayev retailed the young country in front of a slightly thin, late afternoon audience of the Jeddah Economic Forum yesterday.
The birth of the Central Asian state 12 years ago was greeted at the time with serious doubts about its survival and independence. With the extinction of the Soviet dinosaur, Kazakhstan suffered from hyperinflation and unsure borders.
Since 1999, however, it has achieved a remarkable 50 percent growth, with 10 percent predicted for 2004. Dr. Tokayev attributed a great deal of this aggressive surge to the one million small and medium enterprises (SMEs) in a country with a population of only 15 million, and to the 80 percent privatization rate. “Kazakhstan is the most successful country in Central Asia by any economic indicator,” he said, “including GDP.”
With a land area three times that of Saudi Arabia but a smaller population, he accepted that the internal markets are small, but that the government is actively dismantling barriers to boost trade. Access to Russian and Chinese markets are key elements of government policy, but so too is development of new markets in the GCC states, he said.
Over the last 10 years, Kazakhstan has seen $33 billion invested in the infrastructure and state debts reduced to 15 percent of GDP. “Our financial systems are totally transparent,” he said, “and this has resulted in them becoming one of the best in the world, aligning with all internationally recognized accounting standards.”
A net exporter of beef and with a sound agricultural base, Kazakhstan is, like Saudi Arabia, currently negotiating membership of the WTO. Underpinning its future development, Dr. Tokayev said, is the fact that the country has the biggest oil resources in the region — in the Caspian Sea basin. As yet, however, only 30 percent of state revenues derive from oil and gas, representing 20 percent of GDP.
“We produce 50 million tons of oil currently,” he said, “and by 2015, we plan to reach 180 million tons per annum.” A new major pipeline, which will transport oil to the West, will give Kazakhstan an export capacity of 20 million tons per annum and a second pipeline east to China is planned.
Foreign investors — especially in the oil industry — are actively being sought, tempted with a five-year zero-tax break and the minister urged the Saudi business community to take up the opportunity. “We have created a stable political and investment environment in the heart of Eurasia.”
Answering questions about the protection of foreign investment in a relatively new — and therefore untried — country, Dr. Tokayev said: “Over the last six years, Kazakhstan has become the No. 1 of all post-Soviet and No. 2 post-socialist countries for stability and protection of investment. New laws are in place to protect the sanctity of the contract, and any contract signed with us no matter where or how is safeguarded by the government.”
