June 13, 2008
Asia Society International Business Conference
(Summary of Prime Minister Massimov's address and subsequent remarks at the Asia Society International Business Conference in Astana, Kazakhstan)
Kazakhstan has now received some $70 billion in Foreign Direct Investment (FDI), cumulatively.
In 2007, the total of all local investment in Kazakhstan exceeded that year's FDI in the energy sector.
The message is simple: Kazakhstan is on an irreversible course to establish a democratic market economy based on the rule of law and respect for human rights. Its success so far derives from its development of institutions to mediate conflict.
Kazakhstan aims to be within the top 50 most competitive countries in 10 years.
To illustrate how far Kazakhstan has come, look at its past record: Elimination of 1200 nuclear warheads, market economy status in 2002, shift from largely presidential system to presidential-parliamentary system of shared powers, election as OSCE Chairman for 2010—the organization's first non-European country in that role.
A new tax code is in preparation that will make greater use of investment incentives, reducing and simplifying taxes, and be more sensitive to SMEs.
While the details are not yet ready to present, we want to shift the tax system toward EU recommendations and cut the burden on the non-extractive industries and the corporate rate. We plan to decrease the VAT further and change the extractive industry tax to minimize the effect on production.
Past contracts will not be affected by the new tax code provisions if they are ratified by the parliament; if any such contracts are not confirmed by the parliament, they would be subject to the provisions of the new tax code.
Kazakhstan will continue to protect the rights of investors: "Resource nationalism is not the policy of Kazakhstan."Kazakhstan will pursue six goals:
- WTO accession;
- modern legal standards that are predictable;
- economic changes supporting diversification;
- support sustainable development through programs for long term professional development;
- anticorruption measures;
- regional cooperation.
There is an important role for the private sector in relation to government policy; business is an advocate with the shared objective of making things better, and it can contribute considerable technical expertise. More business-to-business cooperation will be required.
We want to encourage the emergence of market conditions in our region; this will permit our agricultural sector to play a role commensurate with its potential, especially in grain exports.
Work force development remains an important concern because it will play a decisive role in the country's future.
Our recent history suggests that we can accomplish these goals; they are within the potential of the people of Kazakhstan.