Kazyna: Spearheading Kazakhstan's Development

1
KazynaSpearheading Kazakhstan's Development
Kairat Kelimbetov London, November 2006
2
Content

• Innovative industrial development strategy
• Fund Kazyna
• Structure
• Instruments
• Priorities
• Financial Institutions under Kazyna
• Our Sample Projects

3
Background on Kazakhstan
4
Kazakhstans Economy in 2006

• Impressive GDP growth since the Russian crisis in
  1998, driving substantial increases in average
  prosperity
• Increasing dominance of the oil gas sector in
  the economy with significant potential for
  further growth
• Pressure building up from real exchange rate
  appreciation
• Overheating of domestic real estate and asset
  prices
• Significant government efforts to diversify the
  economy and overcome the challenges of a
  resource-driven economy
• Identifying the key elements of a long-term
  competitiveness strategy for Kazakhstan is a
  critical priority for the country

5
Performance Comparison
Countries sorted by 1998-2003 annual real GDP
growth rate (CAGR)
Annual growth rate of real GDP
6
Sensitivity of GDP Growth to Oil Price Change
7
Where is Kazakhstan in its Evolution?
8
The Centre of Europe and Asia

• Kazakhstan
• - Gateway to Central Asia, Europe, China and
  South East Asia
• - Aggressive government initiatives such as
• E- government
• Almaty as Financial center
• Space program
• - Logistics hub for traffic between Europe and
  china

CIS Russia - Upside potential high as still
untapped
5 hr radius
China - Western Part of China relatively
underdeveloped

• India
• - Relatively poor infrastructure
• - Minimal incentives from government
• - Various government taxes

• Dubai/ME
• - Growth tapering off
• - High labor costs
• - High cost of communication (internet/telephone)
• - Not close to Russian speaking market

9
Government Initiatives
10
Sampling of Key Cross-Cutting Initiatives

• Macroeconomic Reform agenda to improve
  Competitiveness Harvard University
• Exchange rate policy, institution building,
  financial sector enhancing, Managing Dutch
  Disease etc.
• JERP Joint Economic Program with World Bank
• Kazakhstan Competitiveness Initiative Harvard
  University
• Cluster Approach to Diversify Economy
• Business Climate Improvement
• SME strengthening
• Almaty as a Regional Financial Center
• Work with Boston Consulting Group and various
  stakeholders to evolve Almatys position in the
  CIS
• Regional Development Agenda
• Evolving strategies to reduce the economic
  disparities among the oblasts (provinces)

11
Business Environment Upgrading
12
Upgrading Institutional Capacity
13
Kazyna

• Sustainable Development Fund Kazyna was created
  by the Decree of the President of the Republic of
  Kazakhstan with the purpose to increase and
  stimulate investment and innovation activities.
• Mission
• Effectively manage state investments to diversify
  and increase competitiveness of economy of the
  Republic of Kazakhstan.
• Strategy
• Identification and implementation of investment
  projects in non-extractive sector through
  coordination of National Development Institutions

14
Kazyna Organization
Development Institutions
15
Kazyna as a Coordinator
DBK, SIC, CMARKazinvest
Entrance to foreign markets
Direct funding and loans
DBK, IFK, CMAR, SMEF
Increased exports
Growth stage
NIF, IFK, CMAR, SMEF
Sales growth
NIF, CMAR
Risk financing
Start-up business
Business Concept
Sales begin
Business Plan
Research, information collection and processing
CMAR, SMEF (regional network)
Concept of regional, industry, overall development

• RD and business plan development funding
• Innovational infrastructure
• Market Analysis

• Production development funding
• Infrastructure
• Technologies
• Market analysis

• Production expansion funding
• Technologies
• Market analysis

• Export loans
• Export insurance
• Market analysis
• Export promotion

16
Contact Information

• For more information and discussion of investment
  projects in Kazakhstan
• Sustainable Development Fund Kazyna
• 6 35th Street
• Kazyna Tower
• Astana, 010000
• Tel [phone]
• Fax [phone]
• E-mail manataev_at_kazyna.kz

17
Conclusion

• We invite companies to invest capital,
  technology, know-how, and business experience to
  the economy of Kazakhstan.
• We provide government support through provision
  of analytical reports and long-tern financial
  resources.
• Kazyna is a gateway for investments into
  Kazakhstan and Central Asia