Azernews.Az

By Aynur Jafarova

One of the major objectives of the Customs Union and the Common Economic Space is to increase the investment attractiveness of Kazakhstan.

These remarks were made by head of the International Economic Integration Department of the Kazakh Economy and Budget Planning Ministry Ernar Bakenov.

"Since the establishment of the Customs Union the volume of direct foreign investment in the processing industry of Kazakhstan has increased by 88 percent," he said.

Bakenov noted the increase was from $1.8 billion in 2009 to $3.4 billion in 2012.

"In 2013, the gross inflow of direct investments in Kazakhstan amounted to $24.1 billion," Bakenov said.

The second goal pursued by the government while establishing the Common Economic Space is to develop the processing industries on the basis of expanding sales markets.

"Thanks to more liberal tax policy and investment climate Kazakhstan has a better chance of attracting foreign loans," he added.

Kazakhstan is interested in taking definite steps to improve the investment climate in the country and plans to introduce measures in this regard.

Kazakhstan particularly intends to establish unilateral visa-free requirements for most of the developed countries for a period of 90 days and provide investor visas for the heads of structural departments in foreign companies, he said.

The terms of the lease on agricultural lands for foreigners who invest in commodity agricultural production will also increase.

Kazakhstan will also introduce the one-stop shop principle for investors and create an investment ombudsman institute.

Bakenov went on to say that the Eurasian integration for Kazakhstan is an opportunity to get away from continental isolation.

"Eurasian integration for Kazakhstan is a way to get away from our continental isolation," he said.

He noted Kazakhstan is removed from the open seas.

"Integration is the undisputed format that we can use in these conditions to involve the national economy into the world trade," Bakenov added.

The distance from Almaty, the largest metropolis of the country, to the nearest seaport is more than 3,000 kilometers.

"Hence, high transport costs, which reduce the competitiveness of our products in foreign markets, do not allow us to diversify the economy as soon as possible," Bakenov said.

He believes the Kazakh market is too small and does not create conditions for the growth of domestic enterprises.

"With the establishment of the Common Economic Space the country gets a capacious market population of almost 180 million people, giving domestic producers more options for expansion," he said.

The Kazakh president instructed the government to adopt a law aimed at attracting a new wave of investments.

A draft law on improving the investment climate is expected to be introduced at the Kazakh parliament before June 1, 2014.

The bill includes a new format of contracts with investors describing the government support measures in details.

One of the actions is the compensation of up to 30 percent of the investment costs by the state after commissioning a facility.

The second action is being exempted from corporate income tax, and the third is the long-term order of goods and services of investors by national holdings, national companies, and government bodies.

The Customs Union of Belarus, Kazakhstan and Russia was established in 2010. The purpose of the organization is to form a single customs territory within which no customs duties or economic restrictions are applied. The Single Economic Space of the Customs Union started operating on January 1, 2012.