Current economic situation in Kazakhstan, Jan'21, 2011

KAZAKHSTAN: New Opportunities for Business EMBASSY OF THE REPUBLIC OF KAZAKHSTAN TO THE UNITED STATES OF AMERICA

Did You Know That Kazakhstan… ? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Kazakhstan: Economy Overview ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],* sources: National Bank, Ministry of Economic Development and Trade ** source: World Bank ** * as of January-September 2010 Macroeconomic indicators* 2003 2004 2005 2006 2007 2008 2009 2010 Nominal GDP ($ bn) 30.8 43.2 57.1 81.0 104.9 133.4 115.3 1H62.9 Real GDP growth (%) 9.8 9.6 9.7 10.7 8.9 3.3 1.2 8.0 GDP per capita (current $ at PPP) ** 6 , 808 7,7 42 8,6 99 9, 839 10, 895 11, 353 11,526 11,313 (F) Consumer price inflation (end-period, %) 6.8 6.7 7.5 8.4 18.8 9.5 6.2 7 .3 ** Recorded unemployment (average, %) 8.8 8.4 8.1 7.8 7.3 6.6 6.7 5.9 Current account balance ($ mln) -273 335 -1,056 -1,999 -8,321 6,279 -4,248 4,923 Trade balance ($ bln) 3,6 6,7 10,3 14,6 15,1 33,5 15,2 16,5 External debt ($ bln) 22.7 32.8 43.4 74.0 96.9 107.7 113.2 114.6 Foreign direct investments, net ($ mln) 2,213 5,436 2,117 6,663 7,966 14,783 10,501 6,353

The Global Financial Crisis and Kazakhstan ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Results of the restructuring from macro-point of view ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Key Outcomes of the Anti-Crisis Package ,[object Object],Industrial production 11.0 % Foreign trade turnover 40.1% ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Diversification of Economy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Boosted Industrial-Innovative Development Program 2010-2014 ,[object Object],[object Object],[object Object],[object Object],Construction and Construction Materials 2015 – 80% of demand by domestic production Gross Value Added+76% Refining and O&G Infrastructure Development 2014 – 100% of demand by domestic oil products Gross Value Added+30% Metallurgy 2015 – twofold production and export Gross Value Added+107% Chemical and pharmaceutical Industry 2014 – 50% of demand by domestic production Energy including renewables 2015 – 10% decrease of economy’s energy intensity Transport and Telecommunications boost for new production across all sectors Gross Value Added+63% ,[object Object],[object Object],[object Object]

Investment tax preferences Investment preferences Custom duty exemption State grants in kind ,[object Object],[object Object],[object Object],Can be granted when investor imports equipment or parts to implement the investment project Can be granted as a plot of land, building, construction, machines and equipment and so on. Maximum volume of state grants in kind should not exceed more than 30% of investments in fixed assets. State support of investment

Special economic zones operating in Kazakhstan Astana – New City (construction materials, business) Marine port Aktau (naval transportation, marine freight) Ontustyk (textile industry, agriculture) IT-Park ‘Alatau’ (hi-tech, software) Company established in Free economic zone is exempted not only from paying corporate, land and property taxes but also from value-added tax . Petrochemical Park (petrochemical industry) Atyrau Burabay Burabay (tourism cluster)

Special Economic Zones ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Main investors of the Republic of Kazakhstan (inflow of FDI in 1993 – 1H2010) Yes, the US is one of the top investors to Kazakhstan

Structure of gross inflow of FDI (inflow of FDI in 1993 – 1H2010) … but , again, focus is on extractive sector

Customs Union with Russia and Belarus ,[object Object],[object Object],[object Object],[object Object]

Favorable Tax Legislation ,[object Object],[object Object],[object Object],[object Object],[object Object],T ype of tax Republic of Kazakhstan Russian Federation Republic of Belarus Corporate income tax 20 % 20% 24% Value added tax 12% 18% 20%

WTO accession remains to be a priority ,[object Object],Kazakhstan began the process of accession to the WTO in January 1996 since the official application for the accession WTO and CU negotiations moved in parallel. The pace for creating the CU showed more flexibility from the Governments of Russia and Belarus. Creation of Customs Union Establishment of CU doesn’t “close WTO doors”. Kazakhstan has continued its individual track. Negotiations with the United States and European Union are at the final stage. Negotiations with the US on goods market access have been finalized.

Official Points of Contact SME Development Fund ‘DAMU’ www.damu.kz Development Bank of Kazakhstan www.kdb.kz Investment Fund of Kazakhstan www.ifk.kz National Innovation Fund www.nif.kz Export credit Insurance Corporation ‘ KazExportGarant’ www.kecic.kz National Export and Investment Agency ‘KAZNEX INVEST’ www.kaznex.kz Ministry of Industry and New Technologies ( www.mit.kz ) ‘ Samruk-Kazyna’ National Welfare Fund ( www.samruk-kazyna.kz ) ‘ KazAgro ’ National Holding ( www. nhkazagro.kz ) Investment Portal ‘ Kazinvest’ www.kazinvest.kz

Samruk-Kazyna National Welfare Fund ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Foreign Investors Council chaired by the President of Kazakhstan

3 BASIC REASONS TO INVEST, TRADE AND PRODUCE IN KAZAKHSTAN Favorable Investment Climate ,[object Object],[object Object],[object Object],[object Object],[object Object],1. Natural resources Markets 2. 3.

Thank you for your attention! www.kazakhembus.com EMBASSY OF THE REPUBLIC OF KAZAKHSTAN TO THE UNITED STATES OF AMERICA

Current economic situation in Kazakhstan, Jan'21, 2011

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Current economic situation in Kazakhstan, Jan'21, 2011