Право / 12.Предпринимательское и банковское право

A.M.Seralieva, Candidate of legal sciences

A.N.Kaziyeva, Candidate of economic sciences

Kazakh National Educational University named after Abai

Attraction of foreign investors to the

Republic of Kazakhstan

One of the most important long-term priorities of our country is achievement of real, stable and growing rate of economic growth on the basis of open economy with a high level of investment. The current stage of social and economic development of Kazakhstan is undergoing new qualitative changes, which puts forward the country new challenges and goals. Formation of new economic policy is one of the most important challenges in the medium term. Moreover, as you know, the main motive force of economic growth is investment. Hereupon, the formation of investment policy of the country is equally important challenge which lies before Kazakhstan [1].

Attraction and efficient utilization of foreign investment into the economy of the republic is the foundation, one of areas of mutually beneficial economic cooperation of the Republic of Kazakhstan with foreign countries.

According to Western experts, the investment climate in Kazakhstan generally favorable, but serious obstacles such as bureaucratic obstacles, financial risks, gaps in tax legislation and administration, underdeveloped legal infrastructure in the field of insurance, bonds, etc. can begin to retard the flow of foreign capital and investment. On the other hand, Kazakhstan is considered to foreign investors an attractive market for the most basic characteristic of the business climate, the republic is characterized by large market potential, abundance of natural and human resources. All this, in some ways, was the fact that foreign capital has become an important factor in the economy nowadays.

Meanwhile, foreign capital can play both positive (when properly used), and a negative role, having plunged the economy and the country into an acute debt crisis as experience of other countries shows us that. Attraction of the capital in the maximum extent is not an end in itself (unfortunately, some government officials sometimes poorly understand this), though Kazakhstan attracts hundreds of times

less than those of the same in Latin America, Eastern Europe, China, South-East Asia countries. The problem is the efficient usage and attaching a positive multiplicative effect to the investment that would make it possible to attract new capital proportionately with the increased level of economic development, and then move to the self-financing of investments.

Long absence of effective public policy and the conception of working with foreign capital, using it for investment purposes, in some ways are already affecting economic processes as increase of external debt (at the upcoming line of debt service), increasing non-payment, a significant reduction in investment grade, limited investor interest only by raw material industries, etc. The situation began to be corrected only with the creation of the State Committee on Investments and the adoption of the Law of the Republic of Kazakhstan "On state support of direct investments."

One of the reason is that the world experience to attract and effective use of investment capital from abroad is still not systematically analyzed in most economic science, the principles of the state policy in this area, the mechanisms of effective state regulation are not worked out. It is impossible to pursue correct error-free public policy without scientific awareness of the nature, the role in the movement of capital internationally, the principles of its use for the benefit of the country.

It is necessary to take the following actions for a favorable investment climate:

ü The prerequisite for this is the further decline in inflation, and after it the refinancing rate of the National Bank of Kazakhstan. The important issues are the eradication of corruption in the state apparatus, creating a stable legal and organizational mechanism of working with foreign investors.

ü The development and implementation of measures aimed at sharp increase in volume of investment, including preference and active attraction of foreign direct investment, the creation of conditions for inclusion in the investment process of population savings, etc.

ü Increase of effectiveness of domestic and foreign investment capital. The main prerequisites for this may be the observance of the principles of competitive, openness in draft on funds involved on credit basis.

Obviously, today an exceptional role in the investment policy realization belongs to the regions and local authorities in the conditions of almost complete privatization of the economy. Today, investment activity in different regions of the country is different. These differences depend on stock availability or stockout of natural resources, geographical regions location, level of development of infrastructure, authorities, etc.

Why do the local authorities define today's investment policy?

This is due to the fact that the region today, from our point of view, should work in two directions:

1) activization of small and medium-sized business and 2) activization of usage of cash assets of the population in the investment process.

What should the regions take in these areas today? Of course, the small and medium-sized sectors of the economy in the traditional market economy should the least be associated with state control or regulation, they should function in high competition and mobility.

The main problem in the development of small and medium-sized businesses is the lack of a sufficient means. But if they count on new sources of cash it will be wrong. There are lots of different ways to facilitate the investment process in this area, which should stimulate their development. Keeping up the details, we would like to mention the role of the regions such as the performance of them with state jointly as guarantees for investment foreign loans for small and medium-sized businesses.

We believe that it is necessary to create and improve the legislative and regulatory framework in the investment sphere and to make the necessary organizational arrangements.

First and foremost they are:

ü The stability of the financial, currency and tax legislation and tariff and non-tariff regulation of investments;

ü Advance informing of the entrepreneurs about the proposed changes of the law;

ü Development of procedures and mechanisms protecting investors from the wrongful acts of government agencies.

It is necessary to toughen the procedure of capital export abroad, control on price manipulation in the form of understating of export capital and overstating of import capital. In the near future we should pay special attention to the development of the securities market, without which the further development of the investment process is impossible. The analysis shows that the majority of investments in business entities could significantly recover if they (not shareholders) were active in the stock market.

The process of foreign investment attraction will inevitably go mainly through the sale of shares to foreign investor of joint-business owners at a time when much of the domestic enterprises are privatized. Therefore, the creation of the secondary securities market is a current problem.

It is necessary to take measures on reduction investors’ transaction expenses, not concerning to the direct expenditures on the concrete projects implementation.

In pursuing these aims it is necessary:

ü to develop informational infrastructure of investment market (consulting, institute of project financing, etc.);

ü to ensure security of the investors against criminal environment, to establish a procedure of determination of damaging dimensions, including unfair competition.

Summarizing the above we can draw a conclusion that the provisions of the Law of the Republic of Kazakhstan «On investment» and particularly the provisions concerning investment disputes are in need of further improvement.

Thereby, in the present conditions the problem of creating a favorable investment climate in the Republic of Kazakhstan is in the forefront, which can not be solved without the proper legislative fixing of procedures for resolving disputes involving foreign investors.

References:

1. Addressing to Kazak People "Growth of welfare of the citizens of Kazakhstan is the main goal of public policy", 02.2008 // Reference Legal System "Lawyer" [electronic resource].