TOP INTERVIEWS Interview with Mr. MANSUROV TAIR AIMUHAMETOVICH Ambassador of the Republic of Kazakhstan in the Russian Federation January 17th, 2002 Read our exclusive Interview in Russian Kazakhstan has recently celebrated its 10 years of independence. What are the results of the economic reforms in your country? As you mentioned it, Kazakhstan celebrated its tenth anniversary of independence in December last year. During these years, we experienced a period of sovereign development, which was not easy; one of the most important results was the entry of Kazakhstan into the global community, which has required considerable efforts and hard work. The tasks of economic development were always a major priority for Kazakhstan. And it is natural, because the new factors of influence such as technology, finance, trade, and culture, are spread even in external policy and this is the requirement of present time. The economy is the main arena for competition, and economic successes - basic criterion determining the position of the country in the world and prospect of its further development. In his speech addressed to the people of the country in October 1997, entitled: " Kazakhstan - 2030. Prosperity, safety and improvement of the well-being of all Kazakh people”, President N.A. Nazarbaev has analyzed the course and rates of market transformations, democratization of a society through its first stages of development, and how to strengthening Kazakhstan’s sovereignty. This document provides a unique vision on Kazakhstan’s long-term development and priorities to be accomplished by the year 2030. An important and constructive work on how to reorganize Kazakhstan’s economy was carried out for the last decade. The structural transformations are practically finished. (…) Kazakhstan has entered a period of economic growth, having achieved over 10% growth in 2000. The volume of foreign trade has doubled, and exports have increased by more than 60%. In 2001, this growth rate was maintained in most sectors of the economy. The industry has played a key role in the increase of the GDP. Its new dynamism has given a boost to other branches, and it has had significant repercussions in the development of the economy as a whole. This industrial development was accompanied with qualitative changes in the financial condition of the enterprises as their profit gradually increased, meanwhile the number of the unprofitable enterprises was reduced. There are 150.000 small and medium businesses, and about 1.5 million people are working there. Kazakhstan has carried out successful action on liberalizing the capital environment in summer of the year 2001 for the first time in CIS; half a billion dollars were poured into the national economy. The duly and reliable realization of payments in Kazakhstan is provided by the advanced payment system, which complies with international standards, and corresponds to all requirements of the system of payments. It is worth mentioning that in 2001, the magazine “Euromoney” recognized the banking system of Kazakhstan as one of the most progressive ones among CIS countries. The National Fund of the Republic of Kazakhstan resumed operations in 2001; its role consists in stabilizing the sources of income of the budget, to form reserves in case of financial crisis affecting the economy or for other purposes. 1,2 billion US Dollars is accumulated in the Fund. The oil extraction has to be specially mentioned. Kazakhstan has extracted 23 million tons of oil in the year 1993, in 1999 - 30 mln tons, in 2000 - 35 mln tons, in 2001 volume of production has reached 40 mln tons. According to estimates, by the year 2015, extraction of oil should reach about 150 mln tons. The improvement of the country’s economic situation, and the favorable forecasts concerning prospects of its further economic development have had a positive impact on the investors’ trust towards the economic policy of Kazakhstan. We built a new capital, and its population has now reached half a million people. Astana is changing impetuously; the pace of construction of the city has made it one of the most modern advanced Eurasian centers. According to the Decree of the President of Republic of Kazakhstan the special economic zone « Astana - new city », providing the special regime of the preferential taxation is created since January 1, 2002. According to the experts, more than 80% of all foreign direct investments in Central Asia were invested into Kazakhstan’s economy. The World Bank has ranked Kazakhstan in the top 20 countries in the world for its level of investment. A total amount of 14 billion US Dollars of FDI have been attracted since independence. Kazakhstan is going to enter the World Trade Organization, and it means, that we should prepare for an open market economy having to face high competition from imported goods, to raise quality and to introduce new technologies. During the fifth session of the Council of foreign investors, held in the summer of the year 2001, the Head of the State declared: « the country comes to a qualitatively new stage of development, which is characterized by high rates of economic growth, strong macroeconomics and sound financial system, with fast growth in national savings, better credit ratings, and increased capacity as far as its local market is concerned». Russia and Kazakhstan are the two largest countries on the post Soviet territory. How are the bilateral relations developing? I always emphasize on the high level of partnership achieved in the relations between Kazakhstan and Russia, which allows us to perceive ourselves as firm allies. Our cooperation developed steadily and dynamically; the important questions in economics, politics, and humanitarians, as well as on other issues were consistently solved. The foundations for a strong bilateral cooperation were laid and they are now developing. The year 2000 was especially fruitful, with the official visits of the President of Kazakhstan N.A.Nazarbaev to Moscow in June, and with President V.V.Putin to Astana in October. The documents, which were signed during the visits, concerned the most important fields of bilateral cooperation - interaction on Caspian and Baikonur, cooperation in the power sector, oil and gas, but also transportation and social issues. The Presidents intend to increase their efforts to further harmonize the Kazakhstan-Russian cooperation, to preserve a common cultural heritage though maintaining the identity of their own cultures, and to support the expansion of a common cultural, educative and informative approach. (…) Russia remains the largest trading partner of Kazakhstan, and for the last years the economic relations have received an additional boost as reflected in trade figures. In 2000, the volume of trade between the two countries has reached 4,24 billion USD, i.e, an increase of 71,5% as compared to the 1999 figure. In 2001, we believe this trade should represent about 5 billion USD. The strengthening of Kazakhstan-Russian economic relations can also be observed at the border territories where an effective cooperation has been put in place. The bilateral Contract about frontier cooperation provides everything for an effective work in frontier trade taking into consideration the high industrial and agrarian development of those areas. (…) It is quite obvious, that Kazakhstan and Russia as the largest countries on the post Soviet territory, endowed with rich natural resources, an industrial potential as well as a mutual aspiration to further cooperate, are powerful enough to solve the tasks they are faced to, and which could be summarized to successfully reforming the economy, and to come to the level of the economically developed countries. The modern state of an advanced economic science shows that economics and industrial integration are for sure the imperatives of the future. In this sense, the creation of the Eurasian Economic Community in autumn of the year 2000 has to be a motor in the development of multilateral relations, and in between Kazakhstan and Russia in particular. The development of an economic cooperation between Kazakhstan and Russia becomes the important factor when strengthening the stability of the whole Eurasian territory, especially in a globalized world. Can you give us some examples of significant foreign investors in the country? According to western experts, since independence Kazakhstan occupies the second place behind Russia on the amount of Foreign Direct Investments, and the first per capita. Finding recognition in the international business community by attracting significant amount of investments, Kazakhstan has shown ability to cooperate effectively with foreign companies. A number of normative legal acts regulating the foreign investments were accepted in the Republic. More than 30 bilateral contracts related to the protection of the investments were signed. Kazakhstan has also a number of multilateral agreements about securing foreign investments. It is necessary to note, that Kazakhstan legislation for the foreign investments in priority sectors of the economy and social sectors has introduced additional privileges. The tax law was appreciably improved for the last years and many taxes were reduced. Today, foreign capital is present in all sectors of the economy. As for the investments in Kazakhstan by industry, oil and gas plays a key role (half of all foreign investments); the main investors being the USA (33,5 %), UK (13,4 %), and South Korea (12,4 %). Let’s mention that the Foreign Investment Working Group (FIWG) works in the American Chamber of Commerce, and is dealing with the commercial and legislative issues important to the foreign business community. The group consists basically of the representatives of the professional companies, industries and foreign embassies. (http: // www.amcham.kz/wgroups/foreign) Among the large and well-known foreign companies actively working in Kazakhstan, I want to point out: Chevron-Texaco, British Gas, ExxonMobil, Shell, Lukoil, TotalFinaElf, Agip, BP Amoco, Samsung, and many others. Of course, it is impossible to list all of them. (http: // www.kazecon.kz/rus/2_companies /) The oil pipeline system of Caspian pipeline consortium “Tengiz-Novorossisk” is one of the largest and strategically important investment projects for Kazakhstan. It extents for 1500 km and its throughput up to 67 mln tons of oil. Finally, I would like to emphasize that the State is fully supportive of any investment in the Republic of Kazakhstan through an adequate legislative framework; the State is committed to a liberal trade, and grants tax privileges and preferences in several areas of its economy. Note: WINNE cannot be held responsible for the content of unedited transcriptions.