Export and import challenges in countries with economies in transition - Kazakhstan Presentation by...
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Transcript of Export and import challenges in countries with economies in transition - Kazakhstan Presentation by...
Export and import challenges in countries with economies in transition - Kazakhstan
Presentation by
Ambassador Stephan Nellen,
Geneva, June 18, 2012
Introduction
• Main question of the 5th Session of the Committee on Trade:
How to increase the participation of transition economies in international trade?
• My example: Kazakhstan
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Example: Kazakhstan • Economy based on natural
resource exploitation
•Oil/gas•Metals•Grain
• 2011 trade figures
• Imports 37,9 billion USD
•Exports 88,3 billion USD
•Surplus 50,4 billion USD
What is so special with Kazakhstan?
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Exports of Kazakhstan – sector distribution
• More than 90% of all Kazakh exports go into oil&gas, mining (metals) and agricultural (export of grain) sectors
• Less than 10% of exports cover other items (mainly of the processing industry)
• To promote non-oil/metal/grain exports, need to develop industrial sectors of the economy
• To promote non-oil/metal/grain sectors of economy need further investments into this sectors of economy
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Foreign Direct Investments – Sector distribution
• Foreign Direct Investments (FDI) concentrated mainly in oil/metal sectors (nearly 80%)
• Investments in other sectors (mainly distribution – wholesale/retail, banking and finance, and construction) are not linked to exports, and is 20% only
• Conclusion:
• Need to increase strongly investments in industrial and service sectors which can produce exportable products
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Response of the Kazakh Government
• Objectives:
increase investments in non-oil/metal/grain sectors
Create economic tissue of a normal economy, including SMEs, create more traditional working places
Create better conditions for export related industries in the non-oil/metal sectors
• Approach:
• Reduce imports by promoting local products („local content“ requirement)
• Encourage joint ventures and investments in these sectors
• Increase market base through Custom Union
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Investment promotion: assessment
• Good policies and state programs:
• Investment preferences (e.g. exemption from custom duties, tax brakes)
• Special economic zones• Support for SMEs (Road map for
Business 2020)• Institutional and financial support• Service support• Foreign Investor‘s Council under the
President
• But: important impediments and obstacles remain
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Impediments to foreign investments in Kazakhstan
• Legal environment inconsistent and partly outdated, little guidance from authorities (unfinished reform agenda)
• No independent judiciary
• Criminalization of civil disputes (taxes, custom, etc.)
• Difficulties with work permits
• Increased demands for „local content“
• Antiquated, ex-soviet standards
• Heavy bureaucracy and high level of corruption
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Response of the Government of Kazakhstan
Establishment of a “Council under the Prime Minister to Improve the Investment Climate”
• Members are high officials of the Government (Deputy Prime Ministers, Ministers, high officials), large foreign company representatives of companies present in the country, and a number of foreign Ambassadors
• Objectives:
•1) tackle practical problems in dialogue, find pragmatic solutions•2) promote longterm structural reforms with the aim to come close to relevant OECD standards
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Future tasks of Government to promote growth of investments and trade I
• Encouragement of local production together with foreign actors
• Increase of local managerial capacity in harmony with needs of foreigns investors
• Increase educational level of population
• English as a third language• Bolashak scholarship program
• Better implementation of strategies and programs to enhance local non oil/metal industries
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Future tasks of Government to promote growth of investments and trade II
• Continue to promote service industry: Almaty as a regional financial center, tourism
• Participation in regional integration mechanism, e.g. “Customs Union” with Russia and Belarus, or “Eurasian Economic Space EES”, to broaden market base
• Accession to WTO
• Promotion of Free Trade Agreements (e.g. present negotiations with EFTA)
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