The issue of effectiveness of measures to support and stimulate investment was considered at the Government session chaired by the Prime Minister of the Republic of Kazakhstan Olzhas Bektenov,El.kz cites primeminister.kz.
As noted by Deputy Prime Minister – Minister of National Economy Nurlan Baibazarov, in 2024 it is planned to attract 22.1 trillion tenge of investment in fixed assets, which is 22% more than last year's figure. At the same time, 234 projects worth 2.3 trillion tenge are expected to be implemented within the framework of the Unified Pool of Investment Projects.
Today, the Republic has a number of effective tools to stimulate private capital. Thus, to attract large investors, the mechanism for concluding an Investment Agreement has been improved. In addition, an Agreement on Investment Obligations has been introduced, which guarantees the stability of tax legislation for 10 years. This allows commodity producers to plan financial flows for a long-term period and forecast the return on investment.
In order to attract private funds for geological exploration and replenishment of the mineral resource base of the oil and gas industry, fiscal incentives have been introduced at the conclusion of the Improved Model Contract.
In general, the process of updating the Investment Policy Concept until 2029 is actively underway. In parallel, together with the business community, work is being carried out to improve the existing support measures.
First Deputy Prime Minister Roman Sklyar made a report on the work carried out in the Investment Headquarters. The Chairman of the Board of the Fund Rustam Karagoyshin informed about the measures in the line of NUH "Baiterek" JSC.
Prime Minister emphasised that in the conditions of global competition an important factor in attracting investment is the use of state support instruments. The main priorities for the Government here are the production with the output of high-end products, technology transfer and increase in localisation.
Today in Kazakhstan investors are provided with various preferences in the form of tax benefits, exemption from customs duties, guaranteed order, etc. At the same time, as noted by Olzhas Bektenov, there are questions about the targeted use of investment support tools, efficiency and quality of their provision.
"For example, the institute of special economic zones has not yet been properly developed in our country. At the same time, in most developed countries free economic zones are considered one of the effective tools to attract investment," the Prime Minister said.
He cited World Bank data, according to which tax and customs preferences are only in the third and fourth places in terms of attractiveness. And the first positions are occupied by the creation of a favourable administrative environment and the necessary infrastructure.
"Current attempts to reform our FEZs do not fundamentally solve the problem of improving their efficiency. We spend significant budget funds on the maintenance of management companies, but do not receive proper efficiency and return in the form of investment," Olzhas Bektenov pointed out.
Head of the Government noted that the issue of local maintenance is also important. According to him, the share of domestic goods and services should be significantly increased in the procurement of investors and quasi-governmental sector.
"The state provides a wide range of support to investors, and they, in turn, should fulfil counter obligations to ensure growth in productivity and labour safety, training of local personnel, increase exports and competitiveness of manufactured goods and services," Olzhas Bektenov voiced.
According to Prime Minister, to change approaches is also required in terms of subsidies for agro-industrial complex, as the current practice does not encourage farmers to apply advanced agricultural technologies and innovations.
At the same time, long procedures for obtaining land plots, connecting infrastructure and complexity of construction norms also negatively affect the investment climate.
"The state allocates large funds for support measures, while private capital is not sufficiently involved. Domestic banks and international financial institutions are also not properly involved. In this regard, it is required to take effective measures to effectively attract additional sources of financing," Olzhas Bektenov emphasised.
He added that as a result of insufficient coordination between various government agencies and development institutions, investors do not have information on the range of support measures provided.
"For the convenience of investors it is necessary to introduce a single digital platform for the provision of state support measures. We have been talking about it for a long time, but we can not "boast" of practical results so far," the Prime Minister said.
Based on this, Olzhas Bektenov instructed state agencies to conduct a comprehensive analysis of the effectiveness of support measures as soon as possible and make specific proposals for their improvement, as well as to ensure the full-fledged launch of the National Digital Investment Platform.
"It should consolidate all types of preferences. The purpose of this platform should be to speed up administrative procedures and reduce barriers for investors," he said.
The Ministry of Foreign Affairs of Kazakhstan together with Kazakh Invest is also instructed to develop a detailed plan to attract foreign investment with the indication of promising countries, transnational corporations, industries and other criteria, and the holding company Baiterek to strengthen work on attracting additional sources of cofinancing for investment projects.