in New York city May 11, 2015

Transcription

1 Speech by Ambassador of Kazakhstan to the United States, H.E. Kairat Umarov, at "Getting to Know Kazakhstan, the Region and its Investment Opportunities" Dear Friends, Ladies and Gentlemen, in New York city May 11, 2015 Thank you so much for the generous introduction. It is a pleasure for me to speak today. I would like to express my appreciation to the European- American Business Organization and the American Business Forum on Europe for putting together today's event. Today's discussion comes just after the presidential elections in Kazakhstan. President Nazarbayev s resounding reelection is as much about the past, as it is about the future. Kazakhstan has experienced peace, prosperity and stability under President Nazarbayev s leadership, and the people of Kazakhstan want that to continue. It gave a new strong mandate for President Nazarbayev to carry out further large-scale economic and political reforms. I think, the election result is also reassuring for the business community that works with and in Kazakhstan. After the collapse of the USSR, Kazakhstan was one of the poorest countries emerged in our region. Pensions, salaries were unpaid, external economic links were disrupted. The economy was in shambles.

2 2 Actually it was common for all the countries in the area. But it was handful of them who could successfully transform themselves into market economies and stable societies. It took hard radical economic reforms, right vision and sound management of rich resources for Kazakhstan to become what it is today. If in early 1990s, Kazakhstan's GDP per capita was $700 (in 1996), today it is over $13,000. It is almost 20-fold growth in less than 20 years. According to the World Bank, the Kazakh economy grew at average 6.5% for the last 10 years GDP growth (annual %) (est.) This impressive growth has created a large size of middle class that have a great stake in continuation of the progressive policies. Under 2050 Strategy, Kazakhstan aims to be in the club of 30 most developed economies in the world. Kazakhstan is already working with the OECD to be part of this organization and is carrying out necessary reforms. The President also built his re-election campaign on the vision to carry out the following five institutional reforms: 1. Professional Civil Service on a merit based system to cut red tape and eliminate corruption and nepotism in government. 2. Rule of Law and better protection of property rights through toughening selection of our judges and improving law enforcement agencies to make sure that no one is above the law.

3 3 3. Industrialization and Economic Growth Based on Diversification. As the sudden oil drop indicates, we should build a diversified economy that is not dependent from oil revenues. Right now, we are implementing Nurly Zhol (Bright Path) program that will plug Kazakhstan into regional Silk Road corridors and transform Kazakhstan into a logistical hub of the region connecting China with Europe, Central Asia and South Asia and Persian Gulf. For that purpose, we will invest $9 billion in infrastructure projects with EBRD, World Bank and other financial institutions to finance another $9 billion program to carry out structural reforms. 4. National Identity. We are building a society that is representative and inclusive. In Kazakhstan national identity is based on citizenship, not on the ethnicity. Every child born in Kazakhstan is studying mandatory three languages: Kazakh as a state language, Russian as a language of communication and English as a global language of business and commerce. (Also, Kazakhstan promotes religious tolerance and we are a great believer in unity in diversity.) 5. Transparent Accountable State. There will be step-by-step decentralization in decision making process. The presidential powers will be gradually transferred to Government and Parliament and regional governments. International ratings confirm that Kazakhstan as an emerging market is one of the most attractive economies to do business with. According to the World Bank's Ease of Doing Business Rating in 2015, Kazakhstan's rating is 77 from 189 surveyed (compare: Russia - 62, China - 90, India - 142). According to World Economic Forum's Global Competitiveness Index , Kazakhstan ranks 50 out of 144 economies (compare: China - 28, Russia - 53, India - 71).

4 4 Financial and economic conditions in the country are stable. Kazakhstan's GDP in 2013 was $231.9 billion (Uzbekistan - $50.8 billion, Turkmenistan, - $41.85 billion in 2013, Kyrgyzstan - $7.2 billion, Tajikistan - $8.5 billion). The structure of the Kazakh economy shows the pattern of developed economies with services playing a major role: the service sector %, manufacturing and industries , agriculture about 4.5%. Today services, especially online, e-government ones are helping the citizens to cut the red tape. In 2014, Kazakhstan improved its indicators by 10 positions, jumped from 38th to 28th place among 193 countries on the United Nations ranking of e-government development. (compare: Russia - 27, China - 70, India - 118). As a member of the Eurasian Economic Union, Kazakhstan has the lowest tax rates in the area and is a gateway to the vast market of 180 million population. Any Western company establishing its presence in Kazakhstan will enjoy the best investment environment and easy export of its products produced in Kazakhstan to Russia or any other countries in the region. This year, we expect to join the WTO, which will add to the attractiveness of Kazakhstan. Kazakhstan has no access to open water ports, but we do not consider ourselves isolated by any means. Kazakhstan is land-linked, not landlocked, and we are actually a continental bridge for goods that move from East and West, South to North. By 2020 Kazakhstan aims to become a key transit hub for Eurasia and beyond by developing transportation, logistics, and export centers. Kazakhstan is setting up the Western Europe - Western China International Transportation Corridor, which will cut the transportation time from China to Europe in third (from 30 to 10 days). Today, Kazakhstan-U.S. strategic partnership enjoys dynamic growth. Our leaders frequently talk and meet each other. The United States is one of the major investors in our economy. (Its FDI accounts for $26 billion out of $195 billion attracted since 1993.) However, the bilateral trade stands

5 5 at $2.4 billion, which is far below its potential. Compare it to Kazakhstan's trade with Europe ($53 billion), Russia ($18.9 billion), or China ($17.1 billion). The geography and long distance can be overcome, if the U.S. companies can establish presence in the Kazakh economy. We offer best investment incentives such as: no customs duties upon import of technological equipment; state in-kind grants (a property owned by the Government will be transferred for temporary free of charge use, not more than 30% of total investment); No corporate income tax for 10 years for priority investment activities (equipment production, food processing, chemical industry, pharmaceuticals, metallurgy, textiles, etc.); No land tax for 10 years for priority investment activities; No property tax for 8 years for priority investment activities; 30% cashback on investments after one year of successful operation of the project. Also, American citizens can travel to Kazakhstan visa free up to 15 days. We also issue 5-year visas to our citizens for mutual travels. To be competitive in the globalized world, we are investing in human capital by providing opportunities to study abroad by Bolashak (Future) program. It is an all-expenses paid scholarship sponsored and awarded by the Government to high-performing students for graduate study at overseas universities. Since its implementation in 1993, more than 6,500 students have been awarded the scholarship, with most choosing to study in the United States and the U.K. At any moment in the year, there about 3,000 students studying abroad in the top 100 universities in the world. For those talents, who can't travel to world, we have the Nazarbayev University, where best professors (including American) teach them to be competitive.

6 6 Ladies and Gentlemen, Today, Kazakhstan is on the rise. It is not only a logistical hub and economic powerhouse of the region, but also a preferred place for diplomatic talks and international events. Kazakhstan has helped facilitate talks on Iran by offering Almaty as a venue for two rounds of talks in This year, we are hosting the 5th Congress of Leaders of World and Traditional Religions to promote the culture of tolerance and interreligious understanding. Astana is a host to EXPO 2017, with the theme "Future Energy", which is about sustainable growth, green technologies and renewable energy. Almaty is competing with Beijing to host Winter Olympics We wish the best city to win. Kazakhstan is a young republic, but an ancient nation. This year, we are celebrating the 550th anniversary of the Kazakh statehood. I take this opportunity to invite you to visit Kazakhstan to explore opportunities and see it for yourselves. Seeing is believing. The closest opportunity this year is Astana Economic Forum, which will be held on May If not this year come next year because it is an annual event. Hospitality is an inherent feature of our nation, and a warm welcome awaits those who wish to partner with us in future prosperity. I conclude my remarks by saying that International experience shows that it takes 40 to 50 years of steady progress to achieve a strong, developed and liberal society.

7 7 Mindful that Kazakhstan has been an independent country for only twentyfour years, and given all that we have achieved in that time, we hope that you agree with the people of Kazakhstan that we have a bright future. Strategy 2050 is designed to ensure that. And we look forward to working with you all the leaders of today and tomorrow on achieving our shared goals together. Thank you and will be happy to answer questions you might have.