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E&Y - Kazakhstan attractiveness survey - 2013
Welcome to the third edition of EY’s Kazakhstan attractiveness survey.
In this new edition, we continue to analyze the latest foreign direct investment
(FDI) trends in Kazakhstan and explore
what investors think about the country’s investment climate, as well as its potential.
This year, the country’s macroeconomic, social and political stability have taken
over as the key driver of investment.
This represents a shift from our previous two surveys, which showed that the country’s
low labor costs and productivity gains on offer were its most appealing features.
This change can be attributed in part to the ongoing instability of the global economy.
It is this uncertainty that has led investors to look to countries such as Kazakhstan as a
safer place to grow.
The reality of foreign investment in Kazakhstan confirms this perception. While global FDI inflows declined by 18% between 2011 and 2012, Kazakhstan remained a stable destination for investors, receiving US$14b in FDI inflows.
Investors continue to perceive Kazakhstan as a treasure trove of natural resources, while they also value some knowledge-based, high-value-add sectors that hold considerable promise.
The Kazakhstan Government remains committed to reducing the country's
dependence on extractive industries and developing a more balanced,
knowledge-driven and investor-friendly economy. It continues to improve the
competitiveness and productivity of priority sectors, such as agriculture
and agro-processing; construction and construction materials; oil refining and
support services; metallurgy; chemicals and pharmaceuticals; transportation;
automotive; telecommunication; biotechnology; and alternative energy.
However, our survey findings reveal a wide perception gap between foreign
investors who are already established in Kazakhstan and those who are not. Current
investors are much more aware of the country’s environment and are willing to
explore further possibilities in the market.
Conversely, Kazakhstan needs to change the widely held perceptions of potential
new investors. Most seem not to have Kazakhstan on their investment radar or
remain unaware of the country’s attractive features, locations and sectors that present
opportunities for growth.
To overcome this challenge, it is important that the Kazakhstan Government intensifies
its efforts to communicate the country’s potential to the rest of the world. Even
in a challenging global environment, the message can get through that Kazakhstan is
building a solid framework for moving up the value chain and is developing a welcoming
business culture that is conducive to innovation and growth.