OECD Investment Policy Reviews: Kazakhstan 2017
This review, which was prepared in response to Kazakhstan's 2012 request to adhere to the Declaration on International Investment and Multinational Enterprises (OECD Declaration), analyses the general framework for investment as well as most recent reforms, and shows where further efforts are necessary. It assesses Kazakhstan’s ability to comply with the principles of openness, transparency and non-discrimination and its policy convergence with the OECD Declaration, including responsible business conduct practices. Capitalising on the OECD Policy Framework for Investment, this review studies other policy areas that are of key relevance to investment such as SME policy, infrastructure development, trade policy as well as anti-corruption efforts. Since the first review of Kazakhstan, in 2012, the authorities have made strides in opening the country to international investment and in improving the policy framework for investment as part of their efforts to diversify the economy to avoid continued overreliance on oil. Additional policy measures are nevertheless required to create a stimulating environment for investment if the government wants to fulfil its goal of economic diversification and sustainable development.
Kazakstan's investment regime
Kazakhstan has been determined to make the regulatory framework more conducive to foreign investment. Reforms have resulted in the removal of obstacles to FDI so that foreign investors can now participate in almost all sectors of the national economy on an equal footing with domestic investors. While Kazakhstan is getting closer to OECD levels in terms of statutory restrictions according to the OECD FDI Regulatory Restrictiveness Index, some sectoral restrictions are still posing constraints on investment. Remaining restrictions include mass-media, where equity limits apply; fixed-line telecommunications, where authorisation is required for foreign participation above a certain threshold; security services, where foreign investment is prohibited; and the use of agricultural forestry and land. Kazakhstan also maintains somewhat burdensome conditions with regards to the employment of key foreign personnel, which apply horizontally across economic sectors, and are relatively less typical among OECD countries. Other investment impediments include the weight of the public sector in the national economy. The share of state-owned enterprises in the economy should nevertheless decrease to 15% by 2020 against over 35% in 2016.