The Investment climate of Kazakhstan’s regions

Investment climate - the concept is very complex and multifaceted. The government of Kazakhstan pays great attention to areas such as the investment economy of regions, leveling regional differences, to overcome the crisis and underdevelopment of certain regions. Therefore, Kazakhstan is the most attractive for investment by the state of the CIS.

According to the magazine «Euromoney», the level of investment attractiveness of Kazakhstan occupies 81 th place in the world (just behind Bulgaria). Other CIS countries are located in the order of Russia was on the 95th place, Kyrgyzstan ranked 106th, Uzbekistan - 110th, Ukraine - 115th, Turkmenistan - 125th, Belarus -129 th, Armenia - 135- e.

Over 10 years of independence the country has gone on in the market reforms than the other CIS countries. Thanks to the reforms, Kazakhstan has been able to preserve stability and achieve sustainable economic growth. Thus, according to EBRD estimates, Kazakhstan took the first place among the CIS countries and the third - in Eastern Europe and the Baltic States in terms of attracted foreign investments.

only some regions of Russia can be compared on the ease of investment and tax legislation in our Republic. As a rule, it is the free economic zones, such as Novgorod and Kaliningrad regions. In its investment policy of Kazakhstan took the landmark creation of favorable conditions for foreign investors. That is why the share of foreign investments in Kazakhstan's economy is more than three times higher than than in Russia. As the President of Kazakhstan, Nursultan Nazarbayev, from the beginning of 2001, Kazakhstan has a completely adequate to Western standards of the financial system. "We have taken a very liberal tax legislation, the average rate of income tax we - 8.5 per cent." Furthermore, the VAT is reduced from 20% to 15%.

In recent years, regional investment policy of Kazakhstan is focused on the mining industry, primarily oil.

The largest share of investments was invested in five regions. This so-called pereinvestirovannye regions, four of which - West Kazakhstan, Atyrau, Aktyubinsk and Mangistau oblasts - are active and prospective oil and gas regions. They close one more oil and gas region - Kyzylorda. Concentrating only 18% of the investment potential, these regions have accumulated more than 51% of all investments for the past two years.

In contrast, the top five attractive regions, which concentrate 57% of the investment potential (Almaty, Karaganda, Pavlodar, East Kazakhstan and Kostanai region), less than a third of all investments in Kazakhstan's economy has been invested over the past two years.

East Kazakhstan region is one of the most attractive regions in terms of investment. According to the EBRD estimates, the investment potential of EKR took the 3rd place in the state, and, in view of the risks on the investment attractiveness of the region is on the 10th place. Incidentally, the above-mentioned conference, scientists have noted that the scientific analysis of regional investment and economic problems - this is a civilized way to the socio-economic recovery of any region.

In the investment climate in Kazakhstan has its own characteristics that are significantly different from the Russian. In Russia there is a pattern: the higher the potential of the region, so as a rule, the lower the risk. In Kazakhstan, the increase in investment potential is accompanied by increased risks. If in Russia the correlation coefficient ranks potential and risk areas is 0.41, in Kazakhstan the direct opposite - -0.39. And if you do not take into account the Almaty that for all positions is an exception to the republican economy, as well as Moscow in Russia, the ranks of the correlation coefficient value for the regions of Kazakhstan will be -0.65.

Different nature of the formation of an investment climate can be explained, firstly, the various state role in the investment process. In Kazakhstan, the government spends more targeted policies to create favorable conditions for investors in economically less developed regions.

Secondly, the important role played by the differences in the economic structure of Russia and Kazakhstan. In Russia, for the majority of regions with high investment potential, characterized by a significant level of "upper" floors of the economy - manufacturing, service, scientific and technical complex. In Kazakhstan, "according to the Russian type of" investment climate is formed only in Almaty. For Kazakhstan, more typical is the concentration of the investment potential in regions with mining and heavy industry. It is well known that such a structure of the economy, usually accompanied by high environmental, social, criminal and other types of risk (in Russia a similar situation in the Krasnoyarsk region, Chelyabinsk and Orenburg regions, Yakutia and Yamal-Nenets Autonomous District).

However, the formal reduction of risk and the potential does not relieve investors of the difficult choices. It can invest either in more profitable areas, located in regions with high investment risk, or less effective projects, but in a more "calm" for the regions of the investor.

In addition to Almaty, having a particularly favorable investment climate, other regions of Kazakhstan are divided into three main groups. Each of these groups is peculiar investment climate.

The first group, with high potential and high risk, included two of the most industrialized region - Karaganda and East-Kazakhstan region. Somewhat more favorable conditions for investors to set up in Karaganda region. Improving the investment climate in these regions can be achieved primarily through a radical improvement of the environment. Thus, according to the Ministry of Environment Protection and Natural Resources of Kazakhstan, in the industrialized regions of the share of these regions accounted for more than half of all the emissions of pollutants into the atmosphere (Karaganda oblast - 47.7%, East Kazakhstan - 10.4%).

On the other hand, the limited investment potential, however, combined with the lowest possible risk, has the largest group of Kazakhstani regions, uniting Astana, Aktobe, Zhambyl, West Kazakhstan, Kyzylorda, Mangystau, North Kazakhstan and South Kazakhstan region. This group is headed by the new capital of Kazakhstan - Astana. As in Russia, the capital has a minimal risk, beating on this parameter even Almaty. After the transfer of the capital of this city's economy has developed at a rapid pace, Astana was literally doomed to investment activity. There appeared limited capacity of investigation: development of infrastructure can not keep up the rapid growth. Utilities of new areas of the capital is not centralized, there are problems with water provision.

Other regions Group specialize mainly on agriculture and extractive industries. Therefore, improvement of the investment climate in these regions must be associated with an increase in their capacity through the development of processing industries.

Optimal conditions for Kazakhstan's position is occupied by a group, including Pavlodar, Kostanay, Atyrau and Almaty region. They are characterized by a combination of sufficiently high potential and moderate risk. The leader of this group is the Pavlodar region. A balanced economic structure, represented as the mining and manufacturing industries, in conjunction with the policy of the local authorities to create a favorable environment for business development, make the region very attractive for investors. Suffice it to say that the Agency for Regulation of Natural Monopolies, Competition Protection and Small Business Support included Pavlodar region, along with Astana and Almaty, in the group with the highest rates of business development.

Because Kazakhstan is a unitary state, the rules of the game for the investor are determined at the national level, and about the same in all regions. Consequently, the inter-regional differences in the level of investment risk is not as important as in Russia. Therefore, when assessing the investment attractiveness of regions of Kazakhstan focuses on investment potential.

The most attractive for investors is a powerful mineral resources base of Kazakhstan, as well as heavy industry and sufficiently skilled manpower. Therefore, in the first half of the rankings included the regions, where there are all these factors.

Almaty, despite losing its capital status, is the unquestioned leader of the investment potential. The city has the most powerful labor, consumer and infrastructure capacity is the financial capital of Kazakhstan. However, it should be borne in mind that the excellent financial performance of Almaty are largely based on the fact that it houses the central offices of the largest companies (similar to the situation in Moscow). The real investments made in regions where production is located. This, in a sense, a "virtual" or "office", investments are now beginning to slowly flow into the new capital - Astana.

The next group consists of resource-wealthy and most major industrialized region - Karaganda and East Kazakhstan. Karaganda region is coal and metallurgical base, and East Kazakhstan - non-ferrous metal base of the country. Large separation capacity of these two regions is partly due to the fact that in the Karaganda region Zhezkazgan recently joined, and in the East Kazakhstan - Semipalatinsk.

Further, a significant, almost twofold, on the margin share in the republican potential to be a core group of Regions, led by the Pavlodar region. Despite its small population, this region occupies a monopoly position in a number of industries (more than 35% of the total volume of the Republic of Kazakhstan): coal mining, power generation, production of alumina, ferroalloy and manufacturing tractors. The area is well built infrastructure, development of market economy institutions, high-quality workforce. According to the Institute of Geography, Russian Academy of Sciences, the territory of Pavlodar region in Kazakhstan has the best climatic conditions for the life of the population.

At the close on the investment potential of Kostanai region high resource-potential. It produces 100% of Kazakhstan's bauxite and 83% iron ore. In Atyrau region holds much of the oil production and the production of sulfur, and the most populous of South Kazakhstan region are the largest refining capacity.

The first half closes rating Astana (Table 1). In terms of population it occupies the last place (the last Mangistau region). Despite this, in the capital of high innovative potential and infrastructure. Incomes here are quite high, so is relatively high and consumption potential.

In Akmola region a good infrastructure and innovation, in Almaty - the labor, while the North-Kazakhstan - infrastructure, in addition, it is ranked fifth in the country in terms of monopoly. In Kyzylorda region is relatively high level of telephone penetration. Despite the low overall investment potential, Mangistau region is characterized by intensive development of small business. In Zhambyl oblast Kazakh barite mined whole, and in Aktobe - all chromite ore and produced more than a quarter of ferroalloys. In West Kazakhstan region produces more than half of the republic's gas.