The role of the Economic Research Institutein socio-economic development of Kazakhstan

KEY HIGHLIGHTS

Kazakhstan: Country Overview

GDP per capita: US$ 12 000

GDP growth: 5% in 2012 and projected 6% in 2013

Currency: Tenge, KZT (US$1 ≈ KZT147)

Sovereign Credit Ratings: Standard & Poor’s ― BBB+/Stable (achieved rating

upgrade in November 2013) Moody’s ― Baa2/Stable Fitch ― BBB+/Stable

2

Area: 2.7 million square km (1.1 million square miles) 9th biggest country in the world

Capital: Astana

Population: 16.9 million people at 01 March 2013

Language: Kazakh is the official language, Russian is of

inter-ethnic communication

Key ethnic groups: Kazakh (63.1%), Russian (23.7%)

Stable political and macroeconomic environment:

GDP grew from 11 billion U.S. dollars in 1993 to 203 billion U.S. dollars by the end of 2012.

Competitive geographic location:

Located at a unique cross-roads between Europe, three BRIC countries (Russia, India, China) and the Middle East

KEY MACRO STATISTICS

2009

2010

2011

2013

2014

2017

Congress of World Religions(since 2003 every 3 year)

OSCE Summit in Astana

Organization of Islamic Cooperation

Astana Economic Forum (since 2007, every year)

47th Annual Meeting Board of Governors ADB

EXPO 2017

2008

Eurasian Media Forum (since 2002 every year)

7th Winter Asian Games

The 7th World Islamic Economic Forum

World Anti-Crisis Conference

Major Hosting Events

Annual Meeting Board of Governors EBRD

WORLD WINTER UNIVERSIADE ALMATY 2017

Russia

Italy

Slovak Republic

Kazakhstan

France

Australia

Hong Kong

Singapore

0 20 40 60 80 100 120 140

120

87

48

49

29

15

2

1

KAZAKHSTAN GLOBALLY

Ease of Doing Business: 47/183

Global Competitiveness: 51/144

Source: Global Competitiveness Report 2012-13, WEF

Source: Doing Business 2012, WB

Tajikistan

Ukraine

Russia

Kazakhstan

Turkey

China

United States

Switzerland

0 20 40 60 80 100 120

100

73

67

51

43

29

7

1

Legatum Prosperity Index: 46/142

Source: Legatum Prosperity Index Report 2012

Turkey

Tajikistan

Russia

Kazakhstan

France

Germany

United States

Norway

0 10 20 30 40 50 60 70 80 90 100

89

86

66

46

21

14

12

1

Investments

6

FDI IN KAZAKHSTAN, million US$ TOP 10 INVESTORS IN KAZAKHSTAN, 2006 – 2012

Sources: the National Bank of Kazakhstan, the Agency on Statistics

Total FDI inflows US$ billion

Total, US$ bn

Netherlands 43,1

USA 25,3

UK 11,7

France 10

China 7,8

Russia 6,4

Switzerland 6,3

Italy 5,8

Canada 5,5

Japan 4,4

According to the World Bank, Kazakhstan is among the top twenty the most attractive countries in the world for investment .

Since its independence, Kazakhstan has attracted over US$ 160 billion in FDI, half of which has been invested during the last three years.

Destination to 80% of total FDI per capita to the countries of Central Asia.

The largest investors to Kazakhstan’s economy are the Netherlands, USA, UK, France and China.

The volume of investment in fixed assets consisted of about 36 billion dollars in 2012. Annual investment per capita is amounted to 2.2 thousand U.S. dollars.

KEY HIGHLIGHTS

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2,7814,557 4,106 4,624

8,3176,619

10,624

18,45319,760

19,017 19,059

21,05622,469

INVESTMENT IN FIXED ASSETS

2007 2008 2009 2010 2011 2012

0

10000

20000

30000

40000

50000

60000

0

500

1000

1500

2000

2500

27,682.0

35,005.731,109.6 31,583.2

34,171.1 36,585.4

1,788.0

2,233.7

1,932.9 1,935.02,063.8

2,194.0

Инвестиции в основной капитал, млн. долл

Инвестиции в основной капитал на душу населения, долл.

Investment in fixed assets, mln. US$

Investment in fixed assets per capita US$

STAGES OF DEVELOPMENT

Stages of development

Reforms

Dynamic growth

Economic reforms

Industry development

Investment

1991 - 2000

State investment

Industrial PolicyIndustrial

policy, Industry zones

Competitiveness

2001 - 2010 2011 - 2020

Quality of production

and efficiency

Economy Market transformations

Priority sectors

Innovation policy

Scientific Technological Infrastructure, techno parks

Economy modernization, human capital

Public-private partnership

Foreign and state investments

Creation of favorable investment climate,

Clusters

Protection of internalseсtors

Reference point on basic researches, Reform in Science

Technology transfer, R&D

2021 - 2050

Innovation stage

Smart economy

Knowledge economy

Private sector, world finance

Innovation clusters, International cooperation

National innovation system

9 special economic zones are created - points of growth with special conditions for investment, technology parks, and industrial zones.

REGIONAL BUSINESS HUB

• 0% Corporate Income Tax until 2020-2025 with possibility for extension

• 0% for land and property tax until 2020-2025 with possibility for extension

• VAT– 0% (for products consumed in SEZ) until 2020-2025 with possibility for extension

• Increase of marginal rate of depreciation for tax on the production of software to 40%

• For SEZ “Innovation technopark” – social tax is 0% for 5 years, under certain conditions

• For SEZ “Innovation technopark”– depreciation rate for software increased to 40 %

• Provision of free land in SEZ for a period of up to 10 years from registration time as SEZ resident

• Simplified procedure for the recruitment of foreign labor

SEZ «Burabay»

Development of Tourism

SEZ «Qaraghandy»

Development of chemistry and petrochemistry

SEZ «Pavlodar»

Development of Metallurgy

SEZ «Astana - New city»

Development of capital’s administrative center

SEZ «Ontystik»

Development of Textile

SEZ «Khorgos»

Development of logistics

SEZ «Sea Port Aqtau»

Development of new sector

SEZ «PIT»

Development of IT

SEZ «Petrochemical park»

Development of petrochemical production

FISCAL INCENTIVES in SEZs

NON-FISCAL INCENTIVES

Gate to China, India and South-East Asia

Gate to Russian and European market • Strategic location between

European and Asian business centers

• Main transit area in the region

• Surrounded by attractive markets – China and Russia

• 3 out of 4 Eurasian rail corridors go through Kazakhstan

Location features

NEW SILK WAY: Gateway between Europe and Asia

• The creation of modern transportation and logistic centers provide access to international markets and international infrastructure integration.

• The construction of the international highway through the territory of Kazakhstan “Western Europe – Western China” is due in completion in 2015.

• In the East “Khorgos-Eastern Gate” project is aimed at improving trade relations with the rapidly growing region of South-East Asia and China.

Strategy “Kazakhstan-2050”

PROSPECTS OF KAZAKHSTAN

• To enter the club of TOP 30 developed countries of the world in 2050

• Social modernization on the principles of inclusive development, quality of life and development of human capacity

• An innovation-oriented model of development based on the principles of "green economy“

• Balanced internal regional development

• Active international collaboration and cooperation

MISSION

ECONOMIC RESEARCH INSTITUTE

PROMOTING ECONOMIC PROSPERITY AND IMPROVING KAZAKHSTAN'S COMPETITIVENESS

Economic Research Institute was funded by Government of Kazakh SSR decree in May 1961 according to the state plan of Kazakh SSR Ministry of Economic Development and Trade of the Republic of Kazakhstan is a sole shareholder

STRUCTURE

ECONOMIC RESEARCH INSTITUTE

The Institute has 7 research centers focused on major areas of research

Scientific and methodological support to the system of public planning;

Assessing the competitiveness level of Kazakhstan economy by the methodology of International Institute for Management Development.

Analysis of impact and estimation of macroeconomic effects of involving Kazakhstan into integration processes.

Influence of provisions of the bill on macroeconomic performance;

Influence of provisions of the bill on social development;

Influence of provisions of bill on the development of entrepreneurship;

Influence of provisions of bill on competitiveness parameters of sectors and economic security of the country.

State support of private entrepreneurship in the Republic of Kazakhstan;

Analysis and estimation of industrial and innovational policies and their impact on investment climate.

Elaboration of conceptual propositions on regional policy.

CENTER FOR STRATEGIC ELABORATION AND ECONOMIC RESEARCH

CENTER FOR ECONOMIC RESEARCH EXPERTISE

CENTER OF MACROECONOMIC AND APPLIED ECONOMICS - MATHEMATICAL RESEARCHDevelopment and maintenance of economical

and mathematical models; Conducting applied calculations in the sector of

economics.

CENTER OF THE WORLD ECONOMY AND INTEGRATION RESEARCH

CENTER FOR PERFORMANCE EVALUATION OF PUBLIC BODIES’ ACTIVITIES

Expert - analytical, methodological and organizational support to the System for annual performance evaluation of public bodies.

CENTER FOR ENTREPRENEURSHIP DEVELOPMENT

CENTER FOR SOCIAL AND REGIONAL RESEARCH

Founder of the "Eurasian Economic Club of Scientists“ Association

Organizer of the Astana Economic Forum

Member of the International Association of Regional Studies

Member of 3 Committees UN European Economic Commission

Member of the International School of Assessment

The main partner for research in the framework of UNIDO United Nations (UN)

Exclusive partner of the International Institute for Management Development

(IMD)

Partner of the Central Asian Regional Economic Cooperation (CAREC)

Partner of the Economic Cooperation Organization (ECO)

Official representative of the International Union of Economists of the Republic

of Kazakhstan

INTERNATIONAL COLLABORATION

INSTITUTE IS A PARTNER OF MORE THAN 80 ORGANIZATIONS OF THE WORLD

ECONOMIC RESEARCH INSTITUTE