Economic Figures
Kazakhstan, officially the Republic of Kazakhstan, is a country in Central Asia and Europe. Ranked as the 9th largest country in the world as well as the world’s largest landlocked country, it has a territory of 2,727,300 sq. km (greater than Western Europe). It is bordered by Russia, Kyrgyzstan, Turkmenistan, Uzbekistan and China. The country also borders on a significant part of the Caspian Sea. |
MACROECONOMIC DATA 2007 |
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Population 14,711,068 |
Although the capital city is now Astana (since July 1998), Almaty remains the largest city in Kazakhstan and represents the economical, financial, and cultural center of the country.
Kazakhstan is one of the fastest growing economies of the world. Growth is driven by oil, which has boosted exports, domestic demand and investment. Kazakhstan has the highest FDI (foreign direct investment) per capita in CIS at USD 1,170, well over 80% of all FDI in Central Asia. However the bulk of this investment is in the oil sector.
Kazakhstan holds a leading position in Central Asia on the socio-economic development level. Its investment market can be characterized as dynamically growing: during the last 5 years GDP has increased by more than 9%, while inflation stayed at a low level.
The flow of direct investment into the economy of the Republic from 1993 to 2005 amounts to USD 40.5 bln. The main investor is the USA, comprising about one third of international investments, with most of these being in the oil and gas sector. Such countries as the Netherlands, Great Britain, Italy, and China are also significant investors. Among CIS countries the leading investors are Russia, Belarus and the Ukraine.
The economy is dependent on imports, as domestic wares are often not competitive enough. Import demand is growing.
VAT (value added tax) in Kazakhstan is 13%.
Opportunities for Investors
As a country leading the region in terms of social and economic growth, Kazakhstan could play a key role in the region turning Central Asia into an economically viable and independent region. It could drive and facilitate a dialogue with multinational corporations and incite international investors to develop the entire Central Asian region.
According to the World Bank’s the annual report on status and freedom of entrepreneurship in 145 countries worldwide, Kazakhstan is in the 5th (of seven) group with countries such as Germany, Denmark, New Zealand, Switzerland, Singapore and Georgia, which has the best result in the CIS. We intend to make further efforts to obtain an even higher ranking.
At this time, attracting investment capital to the economy of the Republic is one of the higher-priority tasks of the government. According to expert’s estimates over 80% of all direct investment in Central Asia was made in Kazakhstan. The World Bank ranked Kazakhstan as one of the twenty most attractive countries in the world for investors.
Foreign investors are becoming increasingly interested in the Kazakh market. Therefore there were 7,070 companies with foreign involvement in 2004 versus 6,579 in 2003 and 1,865 in 1999. These figures make it possible to describe Kazakhstan’s investment environment as liberal, enabling foreign investors to operate in virtually all sectors.
Laws have been passed and steps have been taken which have contributed to enhancing the country’s investment image and, accordingly, the inflow of foreign investment in its economy. As a result, Kazakhstan has been leading the CIS for a number of years in terms of FDI per capita.
In view of the limited access of Kazakhstan residents to borrowed reserves on the international capital market, the retention of a stable high inflow of direct international investment is the main factor that guarantees the balance of the balance of payments. According to the results of the year 2007, the surplus balance of operations of direct investment amounts to USD 7.1 bln, in comparison with USD 6.6 bln. of the preceding year.
As a part of the efforts to establish petrochemical facilities in Kazakhstan, (now one of the priority sectors), plans are in place to build a petrochemical plant to produce polyethylene and polypropylene in the west of Kazakhstan. The project is being prepared by the local firm Sat & Co, which is negotiating the involvement of the world’s largest producer of polyethylene and polypropylene – BASELL.
It is planned to implement a number of investment projects in association with the government development institutions. For instance, the JSC Kazakhstan Investment Fund reached an agreement with the Pilkington Firm of the UK (one of the world’s largest producers of glass plates) on collaboration on constructing a plant to produce glass plates in the Kyzylorda Region. There are many similar projects. Investment projects of social and economic significance to both individual regions and the country as a whole are now either being implemented or are expected to be implemented in all parts of Kazakhstan.
In September 2007 the Kazakh government approved a new list of priority activity categories in terms of investment. There are 237 of these in all, including agriculture, light industry, chemical and metallurgical industries, machine building, the electric power sector, transport sector, construction material sector etc. Kazakhstan's strategic aspiration is to become a modern, diversified economy with a high value-added and high-tech component, well integrated into the global economy.
Education, Personnel and Labor Market
The Kazakh unemployment rate has decreased currently to 7%. The job market is characterized by further unemployment rate decreases and growth in salaries.
»The inflation level in 2008 will be 7.9%«, states the Head of the National Bank of the Republic of Kazakhstan, Mr. Saydenov. According to the statistics agency, the inflation level in January - July 2008 was 6.6%, which is 1.1% more than at the same period of the last year (5.5%). The average nominal monthly wage amounts to 56,686 KZT (476 USD).
It is necessary to emphasize that in real figures salaries grew by almost by 20% while the labor productivity during the same period amounted to 9.2%, which is one of the factors influencing the price growth.
Statutory working hours in Kazakhstan are 40 hours per week. A break is at least 30 minutes and should be between 3 and 4 hours after the start of working day. Annual leave consists of 24 calendar days and is given to the employee according to the labor contract, collective contract, and annual leave schedule, which is affirmed by the employer who also takes the employee’s opinion into account. Maternity leave lasts up to 70 calendar days starting before the birth of the child and 56 calendar days after birth. The mother can take annual paid leave for one year.
The educational system in Kazakhstan consists of 11 years of school education; after school there is 4 years of university where students obtain a bachelor degree. Then they need to study for two more years to obtain a masters degree and become a masters of arts. By studying further in local/foreign universities PhD level can be reached. It is also possible to go to college after the 9th grade of school which takes 3 years and enables students to enter the 2nd year of university.
Competent on-site personnel consulting
HILL International Kazakhstan was founded in Almaty, Kazakhstan, in 1997, as a franchise partner of HILL International GmbH Vienna and one of the first HR consulting companies in Kazakhstan.
HILL International Kazakhstan provides a wide range of HR services. The main services are Personnel Search and Selection, HILL_BEST FIT, HILL_Online Matching and Salary Surveys. Most of our clients are foreign companies who already have offices in Kazakhstan or who are going to enter the Kazakhstan market. For example, during the last five years 9 new organizations started their business in Kazakhstan with the help of HILL International Kazakhstan. Among our clients is also large number of local companies. |
Kristina Kravtsova Managing Director |
Due to the favorable financial and economic atmosphere in the country, more and more foreign and local companies are appearing on the market. This allows us to look to the future with confidence.
HILL Kazakhstan is assisted in this by the experience and know-how of the HILL Group. Over 30 years of personnel and management consultancy, scientific methodology, and an extensive network in Europe and Central Asia enables HILL to provide successful consultancy in the areas of personnel and management for numerous firms in diverse branches.
Please contact us if you have any questions or requirements:
HILL International KAZAKHSTAN LLP
Kristina Kravtsova, Managing Director
Kazahstan, Almaty, 050000
Kazybek bi, 65, office 709
Phone: +7 3272 611 721
Fax: +7 3272 616 732
E-mail: kristina@hill.kz
http://www.hill.kz
